Maruti Suzuki beats profit estimates in Q1 on strong SUV demand

Maruti Suzuki, India’s leading carmaker by sales, reported impressive first-quarter results on Wednesday, with profit surpassing market expectations due to robust demand for its sport utility vehicles (SUVs). The company’s shares rose by 3.9 per cent following the announcement.

For the April-June quarter, Maruti Suzuki's standalone profit surged 47 per cent to Rs 3,650 crore, exceeding analysts' forecasts of Rs 3,320 crore, according to LSEG data. The profit increase came despite a challenging automobile market, characterised by a two-year low in car sales due to general elections and extreme summer heat, which negatively impacted demand.

Maruti Suzuki, known for its popular 'Brezza' SUV, was among the first major car manufacturers in India to release quarterly results. The company's overall sales grew at its slowest pace in nine quarters, but the increase in SUV sales was a bright spot. The automaker reported a 29 per cent rise in SUV sales, which contributed to a 9.8 per cent boost in revenue, bringing it to Rs 33,875 crore.

SUVs now account for 31 per cent of Maruti's total sales, up from 25 per cent a year ago, positioning this segment as the company's second-largest revenue contributor, just behind compact cars. The strong performance in the SUV segment highlights Maruti Suzuki's successful strategy in capitalizing on the growing consumer preference for larger vehicles.

In contrast, rival Mahindra & Mahindra, which also specializes in SUVs, reported a larger adjusted profit earlier in the day. This underscores the competitive nature of the Indian automotive market, where demand dynamics and consumer preferences play crucial roles in shaping financial outcomes.

Despite the broader industry slowdown, Maruti Suzuki’s performance reflects its strategic focus on expanding its SUV offerings and meeting evolving customer needs.

Maruti Suzuki shares ended 3.93 per cent higher at record high of Rs 13,380, outperforming the Sensex which closed 0.35 per cent higher.

(With Reuters inputs)