India’s largest carmaker Maruti Suzuki reported on Wednesday its first quarterly loss in more than a decade in the June quarter, owing to the adverse impact of the Covid-19 related disruptions.
The company reported net loss of ₹249 crore as against net profit of ₹1,435 crore in the year-ago period. However, the company still managed to beat estimates made by ICICI Securities, Maruti is expected to report a net loss of around ₹380 crore as result of 82% year-on-year decline in revenue. The company is also expected to report an operating loss of ₹310 crore as result of high fixed cost compared to the year ago period.
In its regulatory filing the company said the June quarter was an “unprecedented” one because “the production in the whole quarter was equivalent to just about two weeks’ of regular working”.
“To the global pandemic of coronavirus, it was once as soon as an extraordinary quarter in the company’s records whereby a large part of the quarter had zero manufacturing and zero sales in compliance with a lockdown stipulated by means of the government. Production and sales began in a very small way in the month of May. The company’s first priority used to be the health, security and well-being of all employees and associates throughout the cost chain including its customers. Hence with cautiously designed safety protocols, which went far beyond compliance levels, the manufacturing in the whole quarter was equal to simply about two weeks of regular working. The results have to be viewed in this context,” the company said.
In April, the company couldn’t manufacture or sell vehicles due to the nationwide lockdown in place.
After resuming production on May 12 at its Manesar factory in Haryana, the company reported wholesale of just 13,865 units during the month. Factory dispatches improved significantly to 51,274 units in June as demand for its entry-level vehicles started picking up.
Revenue from operations declined 79% to ₹4,106.5 crore as against ₹19,720 crore in June 2019. Net sales declined 80% to ₹3,677.5 cr as against ₹18,735.2 cr in the year-ago period.
The company sold a complete of 76,599 motors during the quarter. Sales in the domestic market stood at 67,027 units. Exports had been at 9,572 units.
At 2:25 pm on Wednesday the company’s scrip on BSE was trading 2.2% lower at ₹6,142.
