Shares of Maruti Suzuki declined 3 per cent to touch an intraday low of Rs 6,940 on BSE after the auto giant posted its earnings for the quarter ended June 2021.
Maruti Suzuki reported a net profit of Rs 4,40.8 crore in the April-June quarter, compared to a loss of Rs 2,49.4 crore during the same quarter last year. The company said profit for Q1 was impacted due to lower sale volumes.
The stock ended 2.21 per cent lower at Rs 6,991.90 against the previous close of Rs 7,150.20 on BSE. Market cap of the auto maker fell to Rs 2,11,211.36 crore.
During Q1 FY22, the company registered net sales of Rs 16,798 crore, compared to Rs 3,677.5 crore in Q1FY21. It sold a total of 353,614 units during the quarter, including 308,095 units in the domestic market and 45,519 units were exported. Its profit before tax stood at Rs 5,63.5 crore in Q1, while operational EBIT was Rs 77.9 crore.
Maruti had sold 76,599 units during the same period last year, including 67,027 units in domestic and 9,572 in overseas markets. The total sales in Q1 FY19 stood at 490,479 units.
“The second Covid-19 wave adversely impacted the Q1 production and sales. While all parameters this quarter were substantially better than Q1 of FY2020-21, a comparison is not meaningful because Q1 last year had a much higher degree of disruption due to the pandemic. Sales in Q1 remain far below the previous high in Q1 of FY2018-19,” the company said.
Kotak Institutional Equities has a ‘Sell’ rating on the stock with a target price of Rs 6,000 per share. “We maintain sell as we are concerned on market share loss in SUV segment and rich valuations,” the brokerage house said.
“The company reported troughs in margin, volumes and model cycle keep us overweight,” Morgan Stanley said. The brokerage firm has a ‘Overweight’ rating on the stock with a target price of Rs 8,307 per share.
According to MarketsMojo, the technical trend has deteriorated from Bullish on July 28, 2021, and the stock is technically in a Mildly Bullish range right now.
The company board today unanimously decided to confer Osamu Suzuki, who retired from the Suzuki Motor Corporation board in June 2021, the title of “Honorary Chairman” for his “deep commitment to Maruti” over the last 40 years.