Maruti Suzuki India reported a challenging second quarter for fiscal year 2025, with net profit declining by 17.4% year-on-year to ₹3,069.2 crore, down from ₹3,716.5 crore in Q2FY24. This decline was largely attributed to subdued domestic sales and an overall slowdown in demand, compounded by a provision of ₹837.6 crore related to changes in tax regulations under the recent Finance Act 2024. The act withdrew indexation benefits and revised tax rates on long-term capital gains for debt mutual funds, impacting the company’s profit margins.
Despite revenues remaining flat, they slightly increased by 0.4% to ₹37,202.8 crore compared to ₹37,062.1 crore the previous year. The company’s total vehicle sales for the quarter reached 541,550 units, with domestic sales falling 3.9% to 463,834 units, while exports grew by 12.1% to 77,716 units. The overall sluggishness in domestic demand overshadowed the positive performance in the export market.
Maruti Suzuki’s EBITDA also faced challenges, declining 7.7% YoY to ₹4,417 crore, which led to a drop in EBITDA margin from 12.9% to 11.9%. The company’s stock reacted negatively, dropping over 3% to ₹11,135 on the National Stock Exchange (NSE) following the results announcement.
Additionally, Maruti Suzuki announced the in-principle approval for the amalgamation of Suzuki Motor Gujarat Private Limited with itself, aimed at consolidating operations and enhancing manufacturing efficiency. This merger is set to take effect on April 1, 2025, pending regulatory approvals.
Investors’ disappointment with the company’s performance is reflected in the modest 9% returns on Maruti Suzuki’s stock over the past year.
Disclaimer: This summary is for informational purposes only and does not constitute financial advice. Please conduct your own research or consult a financial advisor before making investment decisions.
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