Maruti Suzuki’s profits are down 17% year over year, and its shares fall 6% as Q2 no-miss estimates

Maruti Suzuki Q2 results: On Tuesday, October 29, 2024, the car giant Maruti Suzuki’s share price fell 6.42 percent to an intraday low of Rs 10,744.10 per share.

The fall in Maruti Suzuki share price came after the company’s Q2FY25 results fell short of estimates. 

In comparison to Q2FY24, when it made Rs 3,716.5 crore, the company’s standalone profit fell 17.4% year-over-year (Y-o-Y) to Rs 3,069.2 crore in Q2FY25.

In the September quarter of the fiscal year 2025, Maruti Suzuki’s operating revenue increased by a slight (0.4 percent) year over year to Rs 37,202.8 crore from Rs 37,062.1 crore in the same quarter the previous year.

In the September quarter of FY25, operating profit, or earnings before interest, tax, depreciation, and amortisation (EBITDA), decreased 7.7 percent annually to Rs 4,416.6 crore from Rs 4,784.20 crore in the same quarter the previous year.

From 12.9 percent in the September quarter of FY24 to 11.9 percent in the September quarter of FY25, the operating profit margin, or EBITDA margin, decreased by 100 basis points (bps).

In the reviewed quarter, the company sold 541,550 vehicles, of which 463,834 were sold on the domestic market and 77,716 were exported.

Maruti Suzuki said in a statement that “the export volume grew 12.1 percent compared to the same period of the previous year, while the domestic volume declined by 3.9 percent.”

InCred Equities, a domestic broking, reports that Maruti Suzuki’s Q2 EBITDA fell short of projections. It added that this miss was caused by a 170 bps Q-o-Q gross margin correction.

However, a 2 percent increase in PBT was caused by higher other income (+51 percent Q-o-Q). PAT was normalised to account for the Rs 840 crore additional deferred tax provision brought about by changes in Treasury income taxation.

“We keep our Add rating because its precise marketing strategies allow us to navigate a challenging demand environment with reduced channel inventory. An important trigger to keep an eye on will be the EV launch plan in FY25F, according to InCred Equities analysts.

Maruti Suzuki’s stock was down 5.38 percent at Rs 10,864.55 per share at 2:50 PM. By contrast, the BSE Sensex was up 0.41 percent at 80,331.25.