Maruti Suzuki stock closes 3.85% higher on nod to lower royalty payment agreement

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Maruti Suzuki stock closes 3.85% higher on nod to lower royalty payment agreement

The Maruti Suzuki stock rose up to 4.72% or 438 points after country's largest car maker posted a 2.96 per cent rise in net profit at Rs 1,799 crore for the October-December quarter of the current financial year, hit by higher input costs. The firm reported Rs 1,747.2 crore in net profit for the same period of the previous financial year.

At 9:31 am, the stock was trading 2.94% or 272 points higher at 9550 on BSE. The stock hit its all time high of 10,000 on December 20, 2018.

The stock logged Rs 289,451 crore in market capitalisation on BSE.

The stock closed 3.85% or 357 points higher at 9,634.50 level.

The substantial rise in stock can be attributed to the firm's board approving changes in method for calculating royalty which will lead to lower royalty payments for new model agreements. The changes start from Ignis. The revisions in royalty calculation will be tabled before the Board of Suzuki Motor Corporation for approval before being implemented, Maruti said.

Maruti Suzuki saw its revenue from operations rise to Rs 19,283.2 crore from Rs 19,196.5 crore. The company sold a total of 4,31,112 units during October-December period in the current fiscal, an increase of 11.3 per cent as opposed to the 3,87,251 sold during the third quarter last fiscal.

The company sold 4,00,586 units in the domestic markets against 3,56,503 units during Q3 last fiscal, a growth of 12.4 per cent on yearly basis. Exports declined marginally with 30,526 units sold in international market.

The firm attributed a meagre rise in net profit by 2.96 per cent due to increase in effective tax rates and lower non-operating income due to mark-to-market impact on the invested surplus, compared to last year. Operating profit for the company increased by 22.1 per cent to Rs 3,037.80 crore.

 

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