Maruti Suzuki Shares Tumble Despite Record Sales
Maruti Suzuki India's shares fell by 2.5% after quarterly earnings underwhelmed investors. Despite a 4% rise in net profit and record domestic sales, the company faced a significant one-time cost due to new labour codes, eroding market valuation by Rs 11,862.41 crore.
- Country:
- India
On Thursday, shares of Maruti Suzuki India fell 2.5% after the country's leading carmaker reported lackluster earnings for the December quarter. The stock closed at Rs 14,499.50 on the BSE, reflecting a 2.54% decline. A one-time provision due to new labour codes impacted the company's net profit, causing concern among investors.
The company revealed a consolidated net profit increase of 4% to Rs 3,879 crore for the quarter. However, the market valuation dropped by Rs 11,862.41 crore to Rs 4,55,868.01 crore. Despite these challenges, Maruti Suzuki achieved its highest-ever quarterly domestic sales of 5,64,669 units, significantly up from 4,66,993 units the previous year.
The GST reform contributed to a recovery in the Indian car market, particularly in the small car segment. Despite a positive revenue hike to Rs 49,904 crore from Rs 38,764 crore year-over-year, the additional Rs 594 crore burden from labour codes dampened the overall financial outlook.
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