Maruti Suzuki reports net loss of Rs 249 crore in Q1 as Covid-19 takes toll

The pandemic has taken a heavy toll on automakers globally as people choose to stay indoors and worsened problems for Indian carmakers
Maruti Suzuki India reported a quarterly loss for the first time since its listing in 2003, as the coronavirus lockdown and supply chain disruptions sapped demand for the country's biggest automaker.

The pandemic has taken a heavy toll on automakers globally as people choose to stay indoors and worsened problems for Indian carmakers, which were already seeing inventory pile up because of weak demand. Maruti's shares fell as much as 2.5 per cent as it reported a net loss of Rs 249 crore for the three months ended June 30, compared with a profit of Rs 1,436 crore a year ago and analysts' average loss forecast of Rs 296 crore, according to Refinitiv data.

The company posted a pre-tax loss of Rs 370 crore, as compared with a profit of Rs 1,853 crore in the year-ago quarter. The carmaker said unit sales slumped 81 per cent year-on-year to 76,599 vehicles as it reported numbers days after Mitsubishi Motors and Nissan Motor forecast record losses.

Global sales at Nissan fell 48 per cent to 643,000 vehicle in April-June as sales halved in North America and fell 40 per cent in China. India went into a lockdown for over two months beginning late March. Maruti said manufacturing during the quarter was equivalent to about two weeks.

Revenue from operations fell nearly 80 per cent to Rs 4,107 crore, it added. The company's strong balance sheet with huge cash and cash equivalents will help it in terms of providing support to its entire value chain system, said Arjun Yash Mahajan, head of institutional business at Reliance Securities. India's auto sales volume is expected to take another 3-4 years to return to peak levels, an industry trade body said earlier this month.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel