NEW DELHI/BENGALURU (Reuters) - Maruti Suzuki India (MRTI.NS) reported a 39% slump in quarterly profit on Thursday, ahead of the crucial festive season, as the country’s biggest carmaker by market value struggled with a slowdown in Asia’s third-largest economy.
Unit sales at the carmaker dropped for the eighth straight month in September, with the industry also battling a credit squeeze, higher insurance costs and a shift towards ride-hailing services such as Ola and Uber Technologies Inc (UBER.N).
Maruti said on Thursday sales for the quarter ended Sept. 30 dropped 30.2% to 338,317 vehicles from a year earlier, but forecast sales to be flat this month year-on-year.
“October should be okay for us in retail sales and wholesale ... but that does not mean we are out of the woods,” Chairman R.C. Bhargava said at a press conference.
Sales this month are crucial for Indian businesses as a run-up to the festive season, which culminates on Oct. 27 this year with Diwali.
Bhargava also said the company will put on hold for now plans to launch electric vehicles for individual use unless there is demand.
But the New Delhi-based company managed to beat market expectations for quarterly profit.
“There were no major incremental negative surprises,” said Basudeb Banerjee, an analyst at Mumbai-based Ambit Capital.
“This was one of the worst quarters and they survived this without giving any ultra shocker.”
The company reported a net profit of 13.59 billion rupees ($191.46 million) for the September quarter, down sharply from 22.40 billion rupees in the same period a year earlier.
Seventeen analysts, on average, had expected a profit of 10.76 billion rupees, according to Refinitiv data.
The maker of popular hatchbacks such as Swift and Baleno reduced production in August and September to cope with the slowdown and in August cut the number of its temporary workers.
Shares of the New Delhi-based company settled down over half a percent, compared with the broader Mumbai market .NSEI which closed 0.19% down.
Reporting by Chandini Monnappa in Bengaluru, additional reporting by Sethuraman N.R.; Editing by Subhranshu Sahu and Sriraj Kalluvila