Maruti Q3 profit down 17%; biggest quarterly fall in nearly 5 years

Maruti Suzuki India (MSI) on Friday reported its second successive decline in quarterly net profit with a 17.21 per cent drop for the third quarter ended December 2018, also the steepest fall in nearly five years.

The India's largest carmaker said its performance in the quarter was adversely impacted by lower-than-expected sales in festive season and high commodity prices and unfavourable foreign exchange rates.

The company said its net profit for the third quarter of the ongoing fiscal stood at Rs 1,489.3 crore as against Rs 1,799 crore in the same period of the previous fiscal.

Total income during the October-December quarter under review stood at Rs 20,585.6 crore as against Rs 19,528.1 crore in the year-ago period, a growth of 5.41 per cent.

The company sold a total of 4,28,643 vehicles during the quarter, a marginal decline of 0.6 per cent, over the same period of the previous year, MSI said in a statement.

This quarter was marked by a combination of several adverse factors coming together which impacted profitability, the company said.

These included adverse commodity prices and foreign exchange rates, higher marketing and sales expenditure, along with higher costs in resources and capacities which were earlier planned to enable a higher estimated growth.

It further said these were partially offset several steps, including cost-reduction and suggestions from employees and supplier partners.

"The company helped dealers retail about 90,000 vehicles in excess of wholesale to keep dealer inventories lean as the festive season sales growth was below expectation," MSI said.