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Maruti Suzuki Faces Volatile Trading and Profit Decline in Q2 Results

Maruti Suzuki India Limited is one of the most recognised automobile companies in India. It has attracted significant attention from investors and analysts due to its key role in the automotive sector. As of 11 November 2024, Maruti Suzuki's shares are priced at ₹11,471.30, down by around ₹3 from the previous session. This article reviews the current performance of the share, recent financial results, market trends, and the implications for investors considering Maruti Suzuki as part of their portfolio.

Current Share Performance

Maruti Suzuki shares had seen quite volatile trading in the recent session. After opening at ₹ 11,331.50, it rose to a peak of ₹11,518.15 during the session. It eventually settled at ₹11,471.30. Trading volume came in around 296,521 shares with some interest in it.

Since the last couple of weeks, Maruti shares have seen much fluctuation as there have been some market dynamics and investor sentiment over the automotive sector.

Day Low: ₹11,310.00

Day High: ₹11,518.15

Previous Close: ₹11,303.00

Market Cap: About ₹3.61 trillion

Thus, this is an important characteristic of Maruti shares, which are still prone to both local as well as global market fluctuations.

Comparison: Maruti Suzuki vs Others

Mahindra & Mahindra (M&M) leads with a market capitalization of Rs. 3.63 lakh crore and impressive quarterly growth in profits (+35.05%) and sales (+10.13%), maintaining a strong ROCE of 13.58%.

Hyundai Motor India shows positive growth in both profits (+12.07%) and sales (+4.34%), with an exceptional ROCE of 51.25%, though it offers no dividend yield.

Mercury EV-Tech, a newer electric vehicle player, struggles with declining profits (-34.67%) and sales (-46.62%), alongside a high P/E ratio, indicating market optimism not reflected in its performance.

Hindustan Motors reports a massive profit growth of +908%, albeit from a small base, with limited sales and a low ROCE of 2.32%.

Maruti Suzuki Q2 Financial Performance

While Maruti Suzuki keeps driving sales through innovation, challenges have been observed lately for the company. The firm had reported an 18% year-on-year decline in consolidated net profit to ₹3,102 crore for the quarter ended September 2024. In comparison, this figure stands at ₹3,786 crore for the same period of the previous fiscal.

Even as profitability declined, total revenue from operations for Maruti Suzuki edged up marginally to ₹37,449 crore versus ₹37,339 crore in the year-ago period, even as revenue generation at the company remains significant.

It was trading down 5.88% at ₹10,807.50 as of Friday's close on the Bombay Stock Exchange after the financial report. Still, it is the most crucial share in the market, with a market capitalization of ₹3.61 trillion and a daily average volume of 585,000 shares.

Impact of the 2024 Dzire Launch on Maruti Suzuki’s Financial Performance

The launch of the new-gen Dzire today comes at a time when Maruti Suzuki is looking to boost its sales figures and improve its profitability amidst a volatile market. The company has traditionally relied on models like the Dzire to drive volumes. The success of the new-generation sedan could play a crucial role in reversing the recent decline in profits.

Given that the Dzire has been a staple in the Indian car market, the upgraded model is expected to attract a large number of customers. The new features, design changes, and modern technology could make the Dzire even more appealing to buyers, especially as it competes in the increasingly crowded sub-compact sedan segment.