Maruti Suzuki rises on price hike, better UV sales in March

Maruti Suzuki shares were trading 2.4 percent higher in the morning trade following announcement of price hike across models and after March volumes showed a significant improvement in sales in the higher-margin verticals.

At 11.30 am, the stock was trading at around Rs 8,495, or 2.4 percent higher than the previous close, on the BSE.

The company raised the prices of its vehicles from April 1. The increase, which was across models, would average around 0.8 percent when calculated using ex-showroom prices of models in Delhi, the country’s largest car-makers said in an exchange filing.

“The company continues to witness increased cost pressure driven by overall inflation and regulatory requirements. While the company makes maximum effort to reduce cost and partially offset the increase, it has become imperative to pass on some of the impact through a price increase,” it said.

Market sentiment also got a boost after March volumes showed a healthy increase in its higher-margin verticals—utility vehicles (UVs) and exports, though overall sales volumes were flat year-on-year.

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In March, the company sold 37,054 UV units, over 48 percent more than the year-ago period. In March 2022, it sold 25,001 units. The models in this vertical include Brezza, Ertiga, S-Cross, XL6 and Grand Vitara.

The company has been trying to expand its presence in this segment, which includes sports utility vehicles and multi-utility vehicles (MUVs), with SUVs becoming increasingly popular. SUVs now command more than 42 percent of the domestic car market.

At the Auto Expo in January 2023, Maruti Suzuki’s MD and CEO Hisashi Takeuchi said the company had “underestimated” the speed of growth in the SUV segment and was now aiming to be the number one player in the segment by FY24.

This March, higher-margin vertical of exports also went up year-on-year. Total exports were at 30,119 cars, nearly a 14 percent increase over last March’s 26,496 units.

Also read: Maruti Suzuki’s FY23 sales volumes touch a record high of over 19.6 lakh units

The company’s overall domestic sales fell to 1,39,952 units from 1,43,899 units a year ago. This brought down the total (domestic plus exports) to 1,70,071 units from 1,70,395 units a year ago.

In FY23, the company posted its highest-ever total sales of 19,66,164 units, a 19 percent increase from FY22.