Maruti Suzuki India limited saw a sharp decline in its quarterly profits as it faces uncertainty due to the coronavirus pandemic. The pandemic has imposed several restrictions and has disrupted operations of the companies causing a difficulty to recover from the worst auto slowdown in the recent years.
The company’s net profit dropped down 28% year on year in January March quarter. The net profit stood at rupees 1291.7 crore as against rupees 1237 crore consensus estimate of analysis. The revenue of the company fell at a drooping 15% to stand at rupees 18198.7 crore in comparison to the estimation of rupees 18335 crore.
The sales of the company also dropped at 16% during the same period due to the virus outbreak and the consequent lockdown which had forced the India’s biggest car maker to cut production by 5.38 percent in the month of February.
Maruti Suzuki – Adding to the crisis, the company had spent aggressive amounts on promotions and advertising during the photo to boost sales which in turn affected its profit margin. It was however try to be balanced out by reducing operating expenses, higher fair value gains on invested surplus, lower corporate tax rate and cost cuts.The carmaker’s operating profit fell 32 percent over last year to Rs 1,546.4 crore. Its margin narrowed 2 percentage points to 8.5 percent.