Chip shortage dents Maruti Suzuki Q2 net profit

Chip shortage dents Maruti Suzuki Q2 net profit

Shares of Maruti Suzuki India (MSIL) gained nearly 1.7% on Thursday early trade even as the country’s largest automobile maker reported weak operational performance during Q2FY22, led by adverse commodity prices.
The volume sales during the quarter was impacted by the shortage of electronic components leading to lower capacity utilisation.
Net revenue was up 9.6% y-o-y to Rs 20,539 crore, led by 13.5% growth in average realisation, partially mitigated by 3.5% decline in volumes.

EBITDA margin for the Q2FY22 stood at 4.2%, which is 50 bps q-o-q and 620 bps y-o-y decline. As a result, the EBITDA and PAT declined 55.8% y-o-y and 65.3% y-o-y to Rs855 crore and Rs475 crore respectively.
The management commentary was cautiously positive, as the company expects supply constraints due to electronic component shortage to improve gradually going forward.
MSIL is expected to sustain its dominant market share, aided by strong product portfolio and position, brand appeal, and ability to frequently launch new models.
Further, the demand for passenger vehicles (PV) is likely to remain buoyant, driven by rising demand in tier-2 and tier-3 cities and rural areas.

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