Maruti Suzuki India fell 3.19% to Rs 6,786.10 on profit booking after rising over 18% in a recent rally.
Shares of Maruti Suzuki India soared 18.04% in the past three trading sessions to settle at Rs 7,009.65 yesterday, 24 September 2019, from its close of Rs 5,938.30 on 19 September 2019.Meanwhile, Maruti Suzuki India announced during trading hours today, 25 September 2019, that it reduced the price of select models by Rs 5,000 (on ex-showroom price). These popular models include all variants of Alto 800, Alto K10, Swift Diesel, Celerio, Baleno Diesel, Ignis, Dzire Diesel, Tour S Diesel, Vitara Brezza and S-Cross. The new prices will be applicable from 25 September 2019, across the country. This reduction of price will be over and above the current promotional offers for the company's vehicle range. The company is optimistic that the price reduction will bring down the cost of acquisition especially for the entry-level customers. This announcement around the festive season will help boost customer sentiment and revive the market to create demand.
The price cut followed the recent corporate tax reduction by the government. Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.
As on 31 March 2019, Maruti Suzuki India paid corporate tax of 29.71%.
Meanwhile, the S&P BSE Sensex was down 386 points or 0.99% to 38,710.96.
On the BSE, 55,890 shares were traded in the Maruti Suzuki India counter so far compared with average daily volumes of 1.81 lakh shares in the past two weeks. The stock hit an intraday high of Rs 6,996 and an intraday low of Rs 6,769 so far during the day.
The stock hit a 52-week high of Rs 8,100 on 24 September 2018. The stock hit a 52-week low of Rs 5,447 on 31 July 2019.
The stock had outperformed the market over the past one month, up 12.09% compared with 4.28% rise in the Sensex. The scrip outperformed the market in past one quarter, up 8.46% as against Sensex's 0.07% rise. The scrip had also underperformed the market in past one year, down 10.08% as against Sensex's 7.69% fall.
Maruti Suzuki India's consolidated net profit fell 31.7% to Rs 1,376.30 crore on a 14.1% decline in net sales to Rs 18,738.80 crore in Q1 June 2019 compared with Q1 June 2018.
Maruti Suzuki India is engaged in the manufacture, purchase and sale of motor vehicles, components and spare parts (automobiles). The other activities of the automobile major comprise facilitation of pre-owned car sales, fleet management and car financing.
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