Maruti posts Rs 268 cr net loss in Q1; first time in red since 2003

The country's largest carmaker Maruti Suzuki India on Wednesday reported first ever quarterly loss since becoming public 17 years back with a consolidated net loss of Rs 268.3 crore for the first quarter ended June 30, hit hard by coronavirus pandemic. The auto major, which got listed way back in July 2003, had posted a consolidated net profit of Rs 1,376.8 crore in the April-June quarter of 2019-20.

Net sales declined to Rs 3,679 crore in the first quarter as against Rs 18,738.8 crore in the year-ago period, MSI said in a statement.

On a standalone basis, the company reported a net loss of Rs 249.4 crore for the first quarter ended June 30.

It had posted net profit of Rs 1,435.5 crore on standalone basis in April-June of 2019-20.

The auto major's net sales during the period under review declined to Rs 3,677.5 crore, as compared to Rs 18,735.2 crore in the year-ago period.

During the first quarter, MSI sold a total of 76,599 vehicles. Sales in the domestic market stood at 67,027 units, while exports were at 9,572 units.

The company had sold 4,02,594 units in the first quarter previous fiscal.

"Owing to the global pandemic of COVID-19, it was an unprecedented quarter in the company's history wherein a large part of the quarter had zero production and zero sales in compliance with a lockdown stipulated by the government," MSI said.

Production and sales started in a very small way in May, it added.

The company's first priority was health, safety and wellbeing of all employees and associates across the value chain, including its customers, the auto major said.

"Hence, with carefully designed safety protocols, which went far beyond compliance levels, the production in the whole Quarter was equivalent to just about two weeks' of regular working. The results have to be viewed in this context," it noted.

Due to coronavirus-led lockdown, the automaker had suspended operations at both Manesar and Gurugram facilities on March 22.

The facilities, with a cumulative production capacity of over 15.5 lakh units per annum, resumed operations on May 12 after 40 days of closure.

The suspension of operations led to zero sales for the company in domestic market in April. It, however, exported 632 units from Mundra port following resumption of port operations.

In May, MSI sold 18,539 units, a dip of 86.23 per cent from 1,34,641 units in same month last year.

Similarly, in June the company's total sales declined by 54 per cent to 57,428 units as compared to June 2019.

The auto major also reported few COVID-19 cases at its Manesar (Haryana) plant.

An FIR was also lodged against seventeen employees of a security agency employed at the same plant for having disappeared after testing positive for the infectious disease.

With easing of restrictions, the company, which has a market share of around 50 per cent in the domestic passenger vehicle segment, is now inching towards pre-COVID levels.

Commenting on MSI's Q1 performance, Emkay Global Financial Services said the company should hold on to the pole position, owing to increase in share of petrol vehicles, focus on new products and network expansion.

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The auto major currently sells various popular models in the country, including Alto, WagonR,? Dzire, Vitara Brezza, Baleno, from Arena and Nexa retail networks. MSI stock ended 1.62 per cent down at Rs 6,185.6 on the BSE on Wednesday.