How do you see the results of Maruti Suzuki for the quarter ended Dec-21?

Broadly, the quarterly sales were under pressure but profits took a hard hit. Output is constrained due to a shortage of microchips, which is a global problem and afflicting all the auto companies globally. Input costs are sharply up due to the commodity spike. Maruti and other auto companies have resorted to a series of price hikes, but that has only partially offset these issues. Here is a quick summary of Maruti.

For the Dec-21 quarter, the sales were down -0.93% at Rs.23,253 crore on a consolidated basis yoy. Volumes also fell sharply yoy. During December 2021 quarter, sales volumes of Maruti Suzuki was 430,668 units compared to 495,897 units in Dec-20 quarter. The lower volumes were due to plant shutdowns for prolonged periods of time. These shutdowns were because auto companies had no choice in the light of microchip shortage.

Operating level profits for the Dec-21 quarter were down -38.11% at Rs.919 crore with the fall being exacerbated by the volumes pressure and pressure on input costs. Operating margins contracted from 6.33% in Dec-20 quarter to 3.95% in Dec-21 quarter. Operating margins were higher on sequential basis. Essentially, the price hikes could only make up for part of the input cost hike as everything from metals to plastics to electronics is costlier.

Net Profits were also sharply lower -47.82% at Rs.1,042 crore on account of the transmission of operating pressures. There was also added pressure from lower non-operating income. Net profit margins contracted from 8.51% to 4.48% in Dec-21 quarter. Net margins were 211 bps higher on a sequential basis. There should hopefully be a better picture once the full production base starts later.