Maruti Suzuki, India`s top-selling car maker, posted a quarterly profit that missed estimates even though sales grew steadily, as a rise in commodity prices and the impact of a new nationwide sales tax ate into earnings.
The company, majority-owned by Japan`s Suzuki Motor Corp, announced on Thursday a profit of 15.56 billion rupees ($242.66 million) for the first quarter ended June 30, up 4.4 percent from the year-ago quarter.
That was below the 17.01 billion rupees average estimate of analysts, according to Thomson Reuters data. (http://bit.ly/2eQcEmf)
Maruti, which provides the bulk of Suzuki Motor`s revenues, sold a total of 394,571 vehicles during the quarter, up 13.2 percent from the year-ago period. Total income jumped 17 percent to 204.60 billion rupees.
Maruti dominates the small car market in India and has been expanding its net by launching more premium vehicles to compete better with newer and planned entrants such as Kia Motors and SAIC Motor Corp. Higher sales of premium models such as the Brezza SUV and Baleno hatchback helped its bottomline in the March quarter.
In the latest quarter, the company absorbed a one-time cost paid to dealers to compensate for the tax loss incurred on vehicles in stock during the transition to the Goods and Services Tax, which India introduced on July 1. The amount was not disclosed with the quarterly results.
Maruti also said its profit was hit by higher commodity prices and costs from sales promotion and marketing.
The automaker also incurred a deferred tax expense of 1.85 billion rupees, more than four times the amount it spent last year.
Shares of Maruti were largely flat after the results. Maruti is valued by the market at more than $35 billion, compared to Suzuki Motor`s market capitalisation of about $21 billion. The Japanese company owns 56.2 percent of Maruti.
($1 = 64.1225 Indian rupees)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How soon will monthly SIP of Rs 6,000, Rs 8,000, and Rs 10,000 reach Rs 5 crore corpus target?
SBI Guaranteed Return Scheme: Know how much maturity amount you will get on Rs 2 lakh, 2.5 lakh, 3 lakh, 3.5 lakh and Rs 4 lakh investments under Amrit Vrishti FD scheme
SBI Senior Citizen FD Rate: Here's what State Bank of India giving on 1-year, 3-year, 5-year fixed deposits currently
SBI Senior Citizen Latest FD Rates: What senior citizens can get on Rs 7 lakh, Rs 14 lakh, and Rs 21 lakh investments in Amrit Vrishti, 1-, 3-, and 5-year fixed deposits
03:09 PM IST