Maruti Suzuki Ltd., India’s largest carmaker, reported a better-than-expected quarterly profit boosted by higher sales of its sports utility vehicles and expanded production capacity.
Net income rose 47 per cent to 36.5 billion rupees ($436 million) in the three months ended June 30 from a year earlier, the unit of Japan’s Suzuki Motor Corp. said in a stock exchange filing Wednesday. That surpassed Bloomberg’s average forecast of 32.72 billion rupees. Shares advanced as much as 2.8 per cent after the earnings were announced.
Revenue climbed 9.9 per cent to 355.3 billion rupees, also beating estimates. Total costs rose 5.6 per cent to 318.2 billion rupees, while raw material costs jumped 16 per cent from the year-ago quarter.
The surge in profit was driven by cost reduction efforts, favorable commodity prices and foreign exchange, the carmaker said in a post earnings statement. The robust earnings reflect Maruti’s stronghold on India’s auto market “- it already had over 40 per cent share in June “- and gives it more firepower for its capital expenditure and plans to roll out electric vehicles.
It sold over 521,000 vehicles, including SUVs and crossovers, in the June quarter “- categories that have buoyed sales in recent quarters and underscoring the changing customer preferences as Indians get wealthier.
Utility vehicles pilot
Known for sparking the affordable small-car revolution in India in the 1980s, the automaker has gained from adding larger vehicles to its product mix. It has seen traction in utility vehicles “- quarterly sales of this segment rose 29 per cent from last year “- while sales of entry-level models declined 12.4 per cent, according to the company statement.
Maruti, which has lagged its Indian rivals in the transition to more environmentally friendly cars, plans to launch its first electric vehicle by 2025 and build out the lineup to six by 2031. Exports of EVs to Japan and some European countries are expected to start later this year.
The carmaker is planning to invest 450 billion rupees to double its annual production capacity to 4 million vehicles by 2031, Chairman R.C. Bhargava told shareholders in August last year.
After expanding capacity at the company’s Manesar plant in Haryana in April, Maruti plans to open a greenfield factory in Kharkhoda in 2025, followed by additions at the Gujarat plant in 2026 and 2028, Bloomberg Intelligence auto analyst Tatsuo Yoshida wrote in a note last month.
Maruti’s shares dropped 4.5 per cent in the June quarter but has recovered a bit since, pushing this year’s rise to almost 27.3 per cent. Rival Tata Motors Ltd., which has the biggest EV lineup among Indian carmakers, meanwhile has jumped almost 49 per cent in 2024, overtaking Maruti by market value to emerge as India’s most valued automaker.
