Maruti Suzuki may see margin decline in Q3 due to volume, cost headwinds

With sales volumes disappointing at the start of the festival season, Maruti Suzuki, the country's largest passenger vehicle company, could be facing a difficult December quarter.This is on account of both lacklustre demand and higher input costs. The company is hopeful of a recovery closer to the Diwali season, led by rural demand. However, flooding in Kerala, higher insurance, financing and fuel costs have derailed demand.After flat sales growth in July and a three per cent drop in August, volumes in September rose by only 0.7 per cent, resulting in a 1.5 per cent fall in the September quarter. Given a weak October so far, volumes would have to rise sharply for the company to meet its full-year forecast for 2018-19 of double-digit volume growth. It had achieved 10.5 per cent growth in the first half of the financial year. The demand outlook, given the Rs 3,500 year-on-year increase in average discounts in the September quarter to Rs 18,750, does not bode well. The other worry for ..

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