Maruti Suzuki share price slumps over 5% as Q2 profit declines 17%

Maruti Suzuki shares fell over 5% in early trading on Tuesday after the company reported weaker-than-expected Q2 results. At 1:45 pm, shares of India’s largest passenger car manufacturer were trading 5.54% lower at Rs 10,846.30 on the Bombay Stock Exchange (BSE).
The company posted a 17% drop in standalone net profit for the September quarter, which came in at Rs 3,069 crore, down from Rs 3,716.5 crore a year earlier. This missed the Street’s expectations, as analysts had estimated a net profit of around Rs 3,525 crore.
The company’s revenue from operations remained nearly unchanged year-over-year, recording Rs 35,589 crore for the quarter versus Rs 35,535 crore in the same period last year. While revenue saw a marginal increase of 0.15%, it fell short of the market’s projected figure, with analysts anticipating a higher contribution from Maruti’s sales amid strong consumer demand.
A major factor impacting Maruti’s Q2 net profit was a rise in deferred tax expenses, which surged to Rs 1,017 crore from Rs 83 crore in the year-ago period. This increase weighed heavily on the company’s bottom line, reducing overall profitability.
Maruti’s EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) for the quarter was Rs 4,417 crore, lower than analysts’ estimates of Rs 4,690 crore. This reflects a year-on-year decline of 7.7%.
The EBITDA margin also contracted by 100 basis points to 11.9% compared to 12.9% in the same quarter last year, further underscoring the impact of higher expenses and lower-than-expected revenue.