BENGALURU (Reuters) – Maruti Suzuki India, the country’s top carmaker by sales, on Wednesday reported a stronger-than-expected rise in third-quarter profit, supported by strong demand for sports utility vehicles (SUVs). did.
Indian consumers typically make big-ticket purchases during the festive season, which continued for much of the third quarter. Maruti’s total sales rose 7.6% to around 501,000 units due to increased sales of more expensive SUVs such as Grand Vitara and Brezza.
After-tax profit for the three months ended December 31 rose 33% to 31.3 billion rupees ($377 million). Analysts on average had expected a profit of 29.25 billion rupees, according to LSEG data.
Still, this is the weakest profit growth since the company reported a decline in profits in the December 2021 fiscal year, which is partly due to weak sales of small cars, including hatchbacks such as the Baleno.
The decline continued throughout last year into the December quarter as high inflation curbed spending in rural areas, the sector’s largest consumer group.
Sales of hatchback maker Swift increased by 14.4% to 318.6 billion rupees.
Analysts said its earnings before interest, taxes, depreciation and amortization (EBITDA) margin widened to 11.7% from 9.8% a year earlier, but was down from 12.9% in the September quarter.
Maruti had offered higher year-end and festival discounts in the third quarter, which combined with higher inventory led to lower margins from the previous quarter.
The contribution of pricier, higher-margin utility vehicles (mainly SUVs) to total passenger car sales rose to nearly 39% in the December quarter from about 24% last year.
Multi shares, which had been rising that day, rose about 3% following the announcement of the financial results, hitting the highest price of the day.