Maruti Suzuki

As one would have expected, after the one month long deadly strike at its Manesar plant, the performance of the company for Q2Fy13 was down. Thanks to the strike, the company lost out over two months of normal production. For the fifth consecutive time, the company posted a decline in its net profit, down 5.41% at Rs.227 crore. The company has stated that the bottom line was affected due to lower non operating income during the quarter; EBIDTA grew 15.4% on a YoY and a 30.4% higher depreciation resulted into reduced profits. What was encouraging to note was that despite the strike, its net sales rose 8.5% at Rs.8070 crore. Higher realization on exports, though exports were down 32% and high demand for Ertiga helped the company post a better topline. In Q2, the company sold 2,09,954 units in the domestic market, down 6% YoY.

Looking ahead, with festive demand and second half seasonally also always being its best, the next two quarters are expected to be much better. Demand for diesel cars is huge and the company has stated that it had a wait list of 1.25 lakh diesel car customers during the quarter. With normalcy returning back to the Manesar plant, it is currently producing close 1,600 units a day and it intends to take it up to its peak of 1,800 units a day shortly. It recently launched a new version of Maruti 800 – Alto 800 and it already has a booking of over 30,000 units. Demand for Ertiga continues to remain high and over the next six months, the company hopes to have an average production of one lakh units. Q3 and Q4 will most certainly be much better, barring any other labour issues.