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Maruti Suzuki: Strong profit performance - Views on News from Equitymaster
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Maruti Suzuki: Strong profit performance
Dec 28, 2015

Maruti Suzuki announced its results for the second quarter ended September 2015 recently. The company reported a 13% YoY and 42% YoY growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary

  • Net sales grow by 13% YoY led by the 10% YoY increase in volumes.
  • Operating profits grow by an impressive 48% YoY as margins expand by 3.9% to 16.3% in 2QFY16. The same is due to lower raw material costs (as a percentage of sales).
  • In tandem with the growth in operating profits, net profits grow at a healthy pace of 42% YoY.

Financial performance: A snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Total Vehicles Sold (No.) 321,898 353,335 9.8% 621,792 694,664 11.7%
Net sales 123,151 139,337 13.1% 237,432 273,586 15.2%
Expenditure 107,829 116,644 8.2% 208,244 229,002 10.0%
Operating profit (EBDITA) 15,321 22,694 48.1% 29,188 44,585 52.8%
EBDITA margin (%) 12.4% 16.3%   12.3% 16.3%  
Other income 1,820 1,371 -24.6% 4,200 3,092 -26.4%
Finance costs 348 178 -48.9% 733 368 -49.8%
Depreciation 5,989 6,694 11.8% 11,825 13,410 13.4%
Profit before tax 10,805 17,193 59.1% 20,830 33,898 62.7%
Tax 2,179 4,937 126.6% 4,582 9,713 112.0%
Profit after tax/(loss) 8,625 12,256 42.1% 16,248 24,185 48.8%
Net profit margin (%) 7.0% 8.8%   6.8% 8.8%  
No. of shares (m)       302.1 302.1  
Diluted earnings per share (Rs)*         149.1  
Price to earnings ratio (x)*         31.0  

Source: (* On a trailing 12-month basis)

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