Maruti Suzuki's margins may slip further on higher commodity costs

The sharp rise in commodity costs dented Maruti Suzuki’s operational performance in the March quarter (Q4). Though revenue growth was up 32 per cent on the back of a lower base and 32 per cent rise in average selling prices, operating profit margin at 8.3 per cent was down 21 basis points (bps) as compared to the year-ago quarter. Reported margins were short of the Street’s 9-10 per cent estimate.   The company highlighted that commodity prices, especially of steel and precious metals, have seen a sharp spike. Cost reduction efforts and a price hike of just under 1 per cent .....

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