Shares of Maruti Suzuki gained over 3 percent intraday on Monday as investors cheered the December quarter results. They largely reacted to the development of lesser royalty payouts by the firm, which it announced during the results declaration.
The company reported a 3 percent growth year-on-year in profit at Rs 1,799 crore for December quarter and cut royalty payment. The board approved a revision in the method of calculating royalty which would result in Lower Royalty Payments for new Model Agreements Starting with Ignis. These changes would be implemented after approval by the board of parent company Suzuki Motor Corporation.
Profitability was hit by lower other income due to mark-to-market impact on the invested surplus and higher tax expenses. Profit for year-ago quarter stood at Rs 1,747.2 crore, the company said.
Revenue from operations for the quarter grew by 14.2 percent to Rs 19,283 crore compared to Rs 16,888 crore in year-ago, driven by double digit sales volumes.
The company sold a total of 4,31,112 vehicles during the quarter, a growth of 11.3 percent over the same period last year, with domestic sales growing 12.4 percent to 4,00,586 units.
The board approved a revision in the method of calculating royalty which would result in lower royalty payments for new model agreements starting with Ignis. These changes would be implemented after approval by the board of parent company Suzuki Motor Corporation.
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