Maruti Q2 net triples to Rs 670 cr after last year's shutdown

India’s largest auto major Maruti Suzuki today posted a nearly three fold increase in its second quarter net profit at Rs 670 crore against Rs227.45 crore in the corresponding period last fiscal.The year-ago profit, however, is not comparable because Maruti witnessed a shutdown at its Manesar plant due to labour unrest.

Analysts on an average had expected Maruti to post a net profit of Rs 528 crore.

The profit jumped mainly because Maruti Suzuki India Ltd’s Manesar factory suffered a breakdown in labour relations in July last year, which led to a month-long shutdown, a $250 million production loss besides one death and over 100 injuries.

The company’s sales were up 26.53 percent at Rs 10,211.83 crore against estimates of Rs10,158 crore.

The major bump up has come in terms of margins due to currency benefits and reduction in raw material costs.

Operating profit margin grew 150 basis points sequentially (up 680 basis points year-on-year) to 12.9 percent during September quarter, aided by raw material cost reduction. “100 bps jump in margins is due to forex benefits from Q1,” Maruti said.

“Higher localisation and cost reduction initiatives by the company also contributed significantly to bottomline growth. The overall impact of foreign exchange was positive during the quarter,” the company said in its release.

In terms of volumes, sales were up by 19.6 percent to 2,75,586 units compared 2,30,376 to the year-ago period.

Shares of Maruti Suzuki India today closed at Rs 1,513 apiece in the BSE, up 0.41 per cent from the previous close..

The result also received a boost from the inclusion of the company’s recent merger with engine production unit Suzuki Powertrain India Ltd.