India’s largest carmaker Maruti Suzuki reported a standalone net loss of ₹249.4 crore for the April-June period — its first quarterly loss since it was listed on the stock exchanges in July 2003 — as production and sales were impacted following the nationwide lockdown.
The company had reported a net profit of ₹1,435.5 crore in the April-June 2019 quarter and ₹1,291.7 crore in January-March 2020.
In a statement, the company said the loss during the quarter was partially offset by lower operating expenses and higher fair-value gain on the invested surplus.
Revenue from sales declined 80% to ₹3,677.5 crore.
“It was an unprecedented quarter in the company’s history; a large part of the quarter had zero production and zero sales in compliance with a lockdown stipulated by the government. Production and sales started in a very small way in May,” Maruti Suzuki said.
“With carefully designed safety protocols, which went far beyond compliance levels, the production in the whole quarter was equivalent to just about two weeks of regular working. The results have to be viewed in this context,” it added.
During the quarter, Maruti sold a total of 76,599 vehicles compared with more than 4 lakh vehicles in April-June 2019. The company’s share price fell 1.62% to ₹6,185.6 on the BSE.
Arjun Yash Mahajan, head, institutional business, Reliance Securities, said the company’s results were subdued due to negative operating leverage in the first quarter of FY21 amid a nationwide lockdown initially and a slow pick up later on.
“Adverse product mix and higher other expenses took a toll on operating margins. However, the strong balance sheet with huge cash and cash equivalent would help support the entire value chain system associated with Maruti Suzuki,” he said.
