Maruti Suzuki IndiaPrivate▼ Negative
Supplyrelevance
Higher raw material costs and a temporary pricing settlement change with suppliers reduced operating margin to 5.1%.
Maruti Suzuki, India's largest automaker, reported a drop in operating margin to 5.1% in the first quarter from 8.8% in the previous quarter. Rising raw material prices weighed on results, with net profit falling 10.8% year-on-year to 33.52 billion rupees, though that beat market expectations of 32.22 billion rupees. The company said a temporary change in its pricing settlement method with suppliers from quarterly to monthly dragged the margin down by 110 basis points, and it expects a recovery in the coming quarters. Total sales volume rose 29.3% to a record 682,724 units, driven by strong domestic sales.
Higher raw material costs and a temporary pricing settlement change with suppliers reduced operating margin to 5.1%.