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Maruti Suzuki Q3 comment: Worst seems to be behind for the car-maker

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The shares of Maruti Suzuki closed about 2 per cent lower on Tuesday in view of disappointing results. While the market expected a higher year-on-year growth in profits, the company clocked only a 5.1 per cent growth to ₹1,564.8 crore. However, considering this in light of the drop in profits in the last few quarters, the return to growth implies that the worst is behind the company. Thanks to the festival season and discounts, volume growth returned, though at a tepid 2 per cent.

A 1.8 per cent increase in average realisations helped sales move up by 3.8 per cent to ₹19,649 crore. However, margin expansion was not on expected lines. While heavy discounting brought in volumes, it affected profitability. Average discount per vehicle during the quarter stood at ₹33,000, compared with ₹24,000 a year ago.

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Secondly, raw material cost as a percentage of sales stood at 76.3 per cent, as against 74 per cent in the same quarter last year. Thus, operating margin came in at 10.1 per cent, only a small improvement over the 9.8 per cent in the December 2018 quarter.

Lower tax expenses helped profits grow better than sales. The company saw a 22 per cent fall in tax expenses during the quarter, thanks to corporate tax rate cuts.

The tax rate for the quarter stood at 22 per cent as against 27.7 per cent a year ago.

Outlook

Maruti is beginning calendar year 2020 on a good note.

With rural incomes expected to look up due to higher crop prices and better rabi sowing and finance availability improving, passenger car sales may gain momentum from now on. The company has introduced BS-VI models for a major part of its portfolio and hence discounting is expected to come down in the current quarter.

Also, considering the rise in price of steel and other precious metals such as palladium and rhodium used in BS-VI vehicles, Maruti has taken a price hike of up to 4.7 per cent across its models from January 27 to partly pass on the escalation.

The only worry is on the company’s decision to discontinue diesel models under BS-VI as of now, especially in popular SUVs such as the Vitara Brezza.

Any loss in market share in this segment in the next few months may hurt the nascent recovery seen in the third quarter.





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ﺍﻟﻤﻮﺟﺰ ﻷﺑﺮﺯ ﺍﻷﺧﺒﺎﺭ ﺍﻟﺮﻳﺎﺿﻴﺔ ﺍﻟﺴﺎﺧﻨﺔ ﻣﻦ ﺑﻲ ﺍﻥ ﺳﺒﻮﺭﺕ bein sports news ﻟﻴﻮﻡ ‏[ 24/02/2020 ]

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2 Ways to Wear Royal Prerogative Curl Clips

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These are clip-in! Yes Royal Prerogative isn’t playing any games with these Curl Clips! They are super soft, bouncy and versatile. Visit RoyalPrerogative.com to get yours. Make sure to give this video a thumbs up, share and subscribe!

Look One:
Royal Prerogative Curl Clips in color 2 (1pack)

Look Two:
Royal Prerogative Curl Clips in color Silver Grey (2 packs)

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South Korea reports 161 new cases of coronavirus, brings total to 763

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SEOUL (Reuters) – South Korea reported 161 new cases of the coronavirus, bringing the total number of infected patients in the country to 763, health authorities said on Monday, a day after the government raised its infectious disease alert to its highest level.

Of the new cases, 115 were linked to a church in the southeastern city of Daegu after a 61-year-old woman known as “Patient 31” who attended services there tested positive, according to the Centres for Disease Control and Prevention (KCDC).

KCDC also reported the seventh death from the virus, a 62-year-old man from a hospital in Cheongdo, a county that saw surges in confirmed cases along with nearby Daegu in recent weeks.

Authorities are still investigating the exact cause of the new outbreak, with Patient 31 having no recent record of overseas travel.

South Korea imposed its highest infectious disease alert on Sunday, vowing extra resources to the region and limiting public activities.

Reporting by Hyonhee Shin; Editing by Himani Sarkar

Our Standards:The Thomson Reuters Trust Principles.



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