India’s largest car maker Maruti Suzuki battles sales slowdown – profit beats street estimates

• Maruti Suzuki announced its earnings report for the first quarter of FY20.
• Its profits have declined by 27.3%.
• However, the company has managed to perform better than the market estimate.

India’s largest car maker Maruti Suzuki’s first quarter sales fell 14% and the profit fell by nearly twice as much, 27.3%.

But the share price gained over a percent immediately after the company’s earnings report because the performance was better than expected.

Over the past few months, car sales have been woefully slow in India, which had led to a lot of talk on performance of auto manufacturers for the quarter.

CLSA, the capital markets research firm, had predicted that its first quarter profits could decline by 35-40%.

Maruti Suzuki, just like its peers, has been reporting its declining sales every month, which also led to the car manufacturer lose its stock market price. The depleting fortunes in India cost the company’s Japanese partner Suzuki $2 billion in market capitalisation in just two days.




Maruti Suzuki said that a number of factors like higher depreciation expense, lower capacity utilisation, adverse commodity prices and higher sales promotion expense, impacted its results. Going forward, the company hopes that a strong product portfolio and commodity prices will help them get back on track.