Maruti reports 28 per cent fall in profit

India’s leading auto maker, Maruti reported its fourth quarter result of FY20 today. The company’s net sales for the quarter were down by almost 17.1 per cent to Rs 17,185.7 crore from the corresponding quarter of previous year.

In Q4FY20, the company sold a total of 3,85,025 vehicles, which was down by 16 per cent over YoY. In domestic market, the company sold 360,428 vehicles, lower by 16 per cent YoY. Exports were at 24,597 vehicles, lower by 16.9 per cent YoY.

Operating profit during the period tanked nearly 50 per cent YoY to Rs 723.4 crore. Operating margin in the quarter deteriorated by almost 280 bps from corresponding quarter of previous year to 4.2 per cent. This margin contraction was led by lower capacity utilisation and higher sales promotion expense.

Profit after tax in the quarter was down by almost 28 per cent to Rs 1,291.7 crore. Lower corporate tax rate, cost reduction efforts and lower operating expenses restricted further fall in profit for the company.

The board of directors recommended a dividend of Rs 60 per share for FY20.