Net sales stood at a record Rs 13,575 crore, as the country's largest automobile maker sold 10 per cent more vehicles compared to last year. However, this was not the highest reported quarterly profit. It had a net profit of Rs 1,284 crore in the March quarter of FY15.
The performance was in line with analysts' expectations. The stock reacted positively to the results and closed at Rs 4,494.60, up 2.44 per cent from the previous day's close. Maruti, which pays royalty of 5.5 to six per cent to Japanese parent Suzuki on net sales, plans to denominate royalty payment in rupee terms instead of yen for agreements on future models, beginning with a compact sports utility vehicle next year.
This will help Maruti eliminate the currency risk while making royalty payments.
Under the current agreements, which are denominated in yen per vehicle, Maruti's outgo turns higher if yen appreciates (vis a vis rupee) and lower if it depreciates. Maruti has in recent quarters benefited from a weaker yen, while making royalty payments. The new agreements will have a royalty cap of five per cent. Models with a higher R&D component from Indian set up will have a lower royalty.
Helped by the Ciaz and the S-Cross, the company sold 353,335 vehicles in the September quarter, a growth of 9.8 per cent over 321,898 units in the same quarter of FY15.
For the six months ended September, it reported net sales of Rs 26,653 crore, against Rs 23,070 crore last year. Net profit in the six-month period grew 49 per cent to Rs 2,418 crore. Volumes rose 11.7 per cent in the six-month period to 694,664 units.
R S Kalsi, executive director (sales and marketing), said the company is hopeful of clocking double-digit growth in sales in the second half of the financial year. It is banking on sales of its hatchback Baleno (launched on Monday at an aggressive price of Rs 4.99 lakh), which will reflect in the volumes of the third and fourth quarter. "The company posted strong set of numbers despite the fact that new launches and promotional expenses restricted margin performance. We have been reiterating Maruti as our top pick to play the recovery in Indian automotive and we continue to believe this," PhillipCapital said in a note. It has a target price of Rs 4,700 on the share. The company reported an Ebitda (earnings before interest, taxes, depreciation and amortisation) margin of 16.3 per cent in the quarter, against an estimate of 16.5 per cent, said Religare.