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Maruti Suzuki India June-Quarter Profit Dives, But Tops Estimates

Shares of the automaker were trading 1.9% higher in afternoon trade, compared with a broader Mumbai market that was up 0.2%.

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Maruti Suzuki India Ltd on Friday posted a 27.3% plunge in its first-quarter net profit amid an industry-wide slowdown in demand, but beat market expectations.

Profit came in at 14.36 billion rupees ($208.11 million), compared with 19.75 billion rupees a year earlier.

Analysts on an average expected the carmaker to post a profit of Rs 13.96 billion, according to Refinitiv data.

Revenue from operations fell 12.2% to Rs 197.20 billion.

Maruti's results underscore slowing demand in the country's auto sector, which has been hit by a credit squeeze, higher insurance costs and a pile-up of inventory, prompting automakers including Maruti Suzuki and Ashok Leyland to cut production. A government push towards electric vehicles has also worried the traditional industry.

Costs dropped 6% during the quarter, the company said in a statement.

The company, which popularised car ownership in the country with its iconic Maruti 800 model, said it sold 402,594 vehicles in the three months ended June 30, down nearly 18% from a year-ago period.

Car sales are considered one of the key barometers of economic growth, which in India slowed to 6.8% for the year ended March 31, its slowest rate of expansion in five years.   

On Thursday, rival Tata Motors Ltd widened its June-quarter loss to 36.98 billion rupees ($535.93 million), compared with a loss of 19.02 billion rupees a year ago.

The country's biggest automaker by market capital, majority owned by Japan's Suzuki Motor Corp, said in April it would phase out all diesel cars, starting April next year.

Shares of the automaker were trading 1.9% higher in afternoon trade, compared with a broader Mumbai market that was up 0.2%.  

(Reuters)


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