Semiconductor chip shortage may keep Maruti Suzuki's margin in check

Declining trend in royalty payment unlikely to cushion the fall

A continuing downward trend in royalty payments by Maruti Suzuki to parent Suzuki Motor is unlikely to arrest the decline in the former’s margins.
 
Lower volumes owing to the shortage of semiconductors and a persistent increase in input costs will keep up the pressure on the company’s margins for the remaining quarters of the year and even next year, said analysts.
 
Earlier this month it said its vehicle production in September would tumble by 60 per cent.
 
Following muted Q1 earnings and the production cuts announced by the company owing to the chip shortage, most brokerages have