Maruti Suzuki has observed a short-term slowdown in the auto industry, but remains optimistic and is concentrating on meeting market demands. Thanks to cost-cutting measures, favorable commodity prices, and foreign exchange benefits, the automaker reported a 48% increase in consolidated net profit, reaching INR 3,759 crore for the April-June FY25 quarter, compared to INR 2,542 crore in the same period last year.
Market Conditions and Company Response
The demand for passenger vehicles (PVs) during the first quarter of the current fiscal year was somewhat muted, largely due to a heatwave and elections that kept many potential customers away from showrooms. Rahul Bharti, Executive Director-Corporate Affairs at Maruti Suzuki, addressed this issue on Wednesday, stating:
'We recognize this challenge and have enhanced our efforts to reach out to customers through various means. We increased our discount offerings, making our products even more attractive. As a result, despite less-than-ideal market conditions, we achieved retail sales nearly on par with the previous quarter.'
Bharti also mentioned that some customers might be waiting for the festive season or an auspicious period, so the company is 'increasing our focus on improving retail sales.'
Financial Performance
Maruti Suzuki reported a 48% rise in consolidated net profit to INR 3,759 crore for the April-June FY25 quarter, compared to INR 2,542 crore in the same quarter of the previous year. The company's consolidated revenue from operations increased to INR 35,876 crore in the June quarter, up from INR 30,847 crore in the year-ago period. This profit increase was due to cost reduction efforts, favorable commodity prices, and foreign exchange benefits, although these were partly offset by higher discounts.
Sales and Export Performance
In the domestic market, Maruti Suzuki sold 451,308 units during the quarter, a 4% increase over the same period in the previous year. The company also exported 70,560 vehicles in Q1, generating revenue of INR 4,481 crore. Regions such as the Middle East, Latin America, and Africa have shown growth for the company. For the full fiscal year, Maruti Suzuki aims to achieve 300,000 exports, with the Jimmy model emerging as the largest export model during Q1.
New Strategies and Models
In June, ET Auto reported on Maruti Suzuki's new strategy to attract small car buyers. To appeal to consumers in this segment, the company introduced the new-generation Swift model and the Dream series edition for three of its models during the quarter.
Despite the short-term challenges in the auto industry, Maruti Suzuki is not worried and remains focused on delivering what the market needs.