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ShareMumbai: Auto companies performed well in the September quarter, helped by the festive season and a decline in the cost of key raw materials such as steel and aluminium.
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Maruti Suzuki, India's largest passenger car company, posted numbers below expectations at the net profit level but in line at operational level. Revenues increased 44.2%, led by a 29.9% rise in sales volumes, higher exports and better realisations, which were helped by a change in product mix (including higher priced products). Operating margins expanded 239 basis points (100 basis points make a percentage point) to 12.7%, helped by lower raw material costs and other expenses. Net profit increased 94.6%.
Mahindra & Mahindra posted better than expected financial results. Revenues increased 35.9%, driven by a 25.6% increase in sales volumes due to good growth in utility vehicles and a sharp increase in tractor sales. Operating profit margins increased 1233 basis points to 18.2% due to lower raw material costs and synergy benefits of merger with Punjab Tractors.
Bajaj Auto's total operating revenues increased 14.6%, helped by a 7% increase in the company's total motorcycles sales and better price realisations. Volumes got a boost from upgrades of Pulsar and the newly launched Discover DTS-Si. Operating margins improved 839 basis points to 22.04%, thanks to stable raw material costs. The positioning of Discover and Pulsar as lead brands in the premium segment has augured well for Bajaj Auto.
Premium segment bikes enjoy higher margins compared with the executive segment. Strong operating performance and nil interest expense helped net profit more than double (up 118%).
Hero Honda's net profit performance was better than expectations. Net profit increased 95%, helped by a lower rate of increase in tax outgo (up 19%), given a 100% exemption on production from the company's Haridwar plant. Total operating revenues increased 26.7%, led by a 21.7% increase in sales volumes and higher price realisations. Operating margins improved 475 basis points to 18.33%, mainly because raw material costs as a percentage of revenues declined 432 basis points.
