(Bloomberg) -- Maruti Suzuki Ltd., which reported a better-than-expected quarterly profit boosted by higher sales of its sports utility vehicles, plans to launch one electric vehicle model a year.
Net income rose 47% to 36.5 billion rupees ($436 million) in the three months ended June 30 from a year earlier, the unit of Japan’s Suzuki Motor Corp. said in a stock exchange filing Wednesday. That surpassed Bloomberg’s average forecast of 32.72 billion rupees. Shares advanced as much as 2.8% after the earnings were announced.
Revenue climbed 9.9% to 355.3 billion rupees, also beating estimates. Total costs rose 5.6% to 318.2 billion rupees, while raw material costs jumped 16% from the year-ago quarter.
The surge in profit was driven by cost reduction efforts, favorable commodity prices and foreign exchange, the carmaker said in a post earnings statement. The robust earnings reflect Maruti’s stronghold on India’s auto market — it already had over 40% share in June — and gives it more firepower for its capital expenditure and plans to roll out electric vehicles.
Maruti, which has lagged peers in launching environmentally friendly cars, will be launching one EV model every year until 2031, Rahul Bharti, chief investor relations officer at the New-Delhi based firm said in a post-earnings call. The first one would be displayed at the Bharat Mobility Global Expo in January 2025 and the second one is “close behind,” Bharti said.
It sold over 521,000 vehicles, including SUVs and crossovers, in the June quarter — categories that have buoyed sales in recent quarters and underscoring the changing customer preferences as Indians get wealthier.
Utility Vehicles Pivot
Known for sparking the affordable small-car revolution in India in the 1980s, the automaker has gained from adding larger vehicles to its product mix. It has seen traction in utility vehicles — quarterly sales of this segment rose 29% from last year — while sales of entry-level models declined 12.4%, according to the company statement.
The carmaker is planning to invest 450 billion rupees to double its annual production capacity to 4 million vehicles by 2031, Chairman R.C. Bhargava told shareholders in August last year.
After expanding capacity at the company’s Manesar plant in Haryana in April, Maruti plans to open a greenfield factory in Kharkhoda in 2025, followed by additions at its Gujarat plant in 2026 and 2028, Bloomberg Intelligence auto analyst Tatsuo Yoshida wrote in a note last month.
Maruti’s shares dropped 4.5% in the June quarter but have recovered a bit since, pushing this year’s rise to almost 27.3%. Rival Tata Motors Ltd., which has the biggest EV lineup among Indian carmakers, meanwhile has jumped almost 49% in 2024, overtaking Maruti by market value to emerge as India’s most valued automaker.
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