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Maruti Suzuki Q2 results: Semconductor shortage weighs on bottomline

Maruti Suzuki Q2 results: Semconductor shortage weighs on bottomline

Last updated: 27 Oct, 2021 | 02:02 pm

Maruti Results: Maruti Suzuki Q2 Results (2021-22) Date & Review

Net profit below estimates: Maruti Suzuki has reported an increase in net profit to Rs 475.3 crore, up by 7.8% as compared to Apr-Jun 21 period. Last quarter the net profit reported was Rs 440.8 crore. On a YoY basis, there has been a 65% drop in net profit as compared to Rs 1,372 crore in the same period last year. The bottomline was impacted due to the ongoing shortage of semiconductor chips. Higher commodity prices also weighed on the bottomline. Analysts had earlier anticipated a profit of about Rs 691 crore.

Increase in revenue: The revenue increased sequentially by 15.6% to Rs 20,538.9 crore. Last year in the September quarter, the revenue reported by India's largest carmaker was Rs 18,745 crore, a growth of 10% Y-o-Y. The analysts have earlier estimated revenue of Rs 19,378 crore. Revenue rose 15.6% to Rs 20,538.9 crore, compared with the Rs 19,378-crore estimate.

EBITDA increase: Earning before Interest, Tax, Depreciation, and Amortization increased by 8.9%, sequentially to Rs 854.9 crore. However, the numbers are below the analysts' estimates of Rs 1,138 crore. EBITDA margin stood at 4.16% against 4.4%.

Update on sales number: The company sold 7% more vehicles in the July-Sep 21 period compared to the Apr-June 21 quarter. The total number of vehicles sold was 3.79 lakh units. However, as compared to the previous year, the total units sold declined by 3% as the number last year for the Q2 was 3.93 lakh units. The lower number is because of constraints the company faced because of a shortage of electronic components.

Margins: PAT margins (percentage of net sales) stood at 2.5% in Q2FY22 as against 7.8% last year and 2.6% in the previous quarter. The lower margins are because of higher commodity prices which have increased its production costs. Even though the company increased the price during the last quarter and bought other cost-saving initiatives, the margins were lower.

Impact of Chip Shortage continues - The company has said that its volume will slump to 60% of its usual level in October month which is the beginning of the festive season as the semiconductor shortage continues. An estimated 116,000 vehicles could not be produced owing to the electronics component shortage mostly corresponding to the domestic models. The company had more than 200,000 pending customer orders at the end of the quarter for which it is making all efforts to expedite deliveries.

Maruti Suzuki Q2 results FY22: Review

While Maruti Suzuki missed estimates on margins and bottomline, the company was able to meet expectations on its topline, owing to resilient sales volumes. The ongoing semiconductor shortage continues to impact the auto industry. The major silver lining is that Maruti Suzuki was able to post a 7% QoQ rise in volumes to 3.79 lakh units in the July-September period, despite it earlier forecast of Swift and Baleno estimated production volume to be around 40% of the normal level in September, after halting production for three consecutive Saturdays and cutting one shift in August. 

Adverse commodity prices and lower capacity utilization have also weighed on the margins. The company made efforts to absorb input cost increases offsetting them through cost reduction and passed on some of the impact to customers by way of price increases. While the challenges in the industry remain due to the shortages, Maruti Suzuki has the necessary firepower to tide over these difficult times, given its leadership position. Maruti Suzuki shares closed nearly 1% higher at Rs 7,350 on BSE.