Shares of Maruti Suzuki fell 2.2% intraday to Rs 7,275 after the country's largest carmaker reported over 39% fall in Q2 net profit from a year ago, amid a sluggish economy that has hit demand across sectors.
The stock price of Maruti Suzuki initially started the day on a bullish note and rose to intraday high of Rs 7,480 on BSE, against the previous close of Rs 7,439.50. However, post earnings, the share value dropped 2.2% to the day's low at Rs 7,275.
Despite the slump in share value today, the stock outperformed the auto sector by 0.45%, as the sector fell 0.32% lower by the closing bell. Market depth data on BSE showed 81% selling against 16% buying in the stock.
The stock price of Maruti Suzuki is trading higher than its 5, 20, 50, 100 and 200 day moving averages. As per technical charts, Maruti Suzuki has formed a bearish bar reversal chart pattern today, indicating bearish momentum in the stock.
Maruti reported a 39.4% year-on-year decline in its net profit at Rs 1,358.6 crore for the second quarter ended September 30. The profit was 5.4 per cent lower compared to Rs 1,435.5 crore in the June quarter.
On the back of an exceptionally weak demand environment, the company sold a total of 338,317 vehicles during the quarter, lower by 30.2% compared to the same period the previous year. Net sales fell 25.2% to Rs 16,120.40 crore in Q2FY20 as against Rs 21,551.90 crore in Q2FY19. Total revenue during the quarter declined to Rs 17,905.30 crore as compared to Rs 22,959.80 crore in the year-ago period, impacted by a fall in sales volumes.
The company's statement read," The automobile industry has seen a significant decline in sales owing to several factors. One of the main factors is an increase in the cost of acquisition of the car due to various reasons coming together like the implementation of more stringent safety and emission (BS6) norms, increase in vehicle insurance expenses and hike in road taxes in many states. Along with this, the lower availability of finance and increased down payment requirement have affected the affordability of customers to own cars."
Maruti Suzuki shares ended 0.66% lower at Rs 7,390 on BSE today.
By Rupa Burman Roy