Aggregate sales (on a consolidated priority basis) of 10 major automobile OEMs for the quarter ended Mar 2021 were higher by 38% to Rs 163576 crore gained by higher volumes as well as better realisation. Higher sales together with 800 basis points (bps) expansion in operating profit margin (OPM) to 14.4%, the operating profit jumped up by 208% to Rs 23550 crore. After accounting for lower other income, flat interest and higher depreciation, the profit before tax (PBT) was a profit of Rs 12930 crore compared to a loss of Rs 1687 crore in the corresponding previous period. Taxation was up by 2% to Rs 1332 crore and thus the PAT was a profit of Rs 11599 crore compared to a loss of Rs 2991 crore in the corresponding previous period. With MI stand higher by 35% to Rs 544 crore, the net profit after MI was a profit of Rs 12142 crore compared to a loss of Rs 2589 crore in the corresponding previous period.

Consolidated net sales of Maruti Suzuki increased 32% to Rs 24034.5 crore led by 28% volume growth and 4% growth in realisation. OPM has slumped from 8.5% to 8.3%, leading to 28.86% decline in operating profit to Rs 1,994.70 crore. However despite lower other income and higher interest cost, the fall at PBT moderated to stand 17% to Rs 1310.20 crore. Share of profit/loss from associates was 71% higher at Rs 73.4 crore. Taxation was down 52% to Rs 142.50 crore. Eventually the net profit attributable to owners of the company decreased 6% to Rs 1241.10 crore.

Among two-wheeler OEMs, the consolidated sales of Bajaj Auto registered 26% growth to Rs 8596.10 crore, primarily led by 23% growth in 2-wheelers volume and 24% growth in exports. But with OPM contract by 70 bps to 17.7%, the growth at operating profit stood restricted at 21% to Rs 1521.88 crore. Eventually the net-profit after MI was up by 15% to Rs 1551.28 crore. Similarly, the other two listed twowheeler players Hero Motocorp and TVS Motors, registered strong performance.

Sales of Hero Motocorp were up by 37% to Rs 8689.74 crore, driven by 18.5% growth in volume as well as higher realisation led by richer product mix and price hikes. Higher sales together with 350 bps expansion in OPM to 14.1%, the growth at operating profit was up 82% to Rs 1226.64 crore. Eventually the net profit (after MI) was up by 46% to Rs 880.94 crore. Similarly, the sales of TVS Motors were up by 49% to Rs 6131.90 crore with its sales volume up by 47% and higher ASP. That together with 90 bps expansion in OPM to 12.6%, the operating profit was up by 61% to Rs 771.50 crore. Eventually the net profit (after MI) was higher by 319% to Rs 310.05 crore.

Tata Motors, country's largest automobile player by sales, reported 42% growth in consolidated sales to Rs 88627.90 crore. Strong sequential recovery in the quarter with CV revenue recovering to pre-pandemic levels and PV revenue reaching multi year highs on the back of new portfolio in India operations as well as strong YoY recovery of retails in China and North America in case of JLR facilitatd higher sales. With the OPM expanding by 1400 bps to 15.1%, the OP was jumped to Rs 13373.73 crore, a growth of 1836%. The PBT was a profit of RS 5703.22 crore compared to a loss of 6512.30 crore in corresponding previous period. Eventually the net loss (after MI) expanded by 23% to RS 7585.34 crore, dragged by 377% jump in EO expense to Rs 13346.49 crore.

Outlook

Second wave of Covid has halted the gradual recovery witnessed by Indian Automobile industry post national lockown of last year. Thus, Q1 of FY2021 will be challenging but due to good monsoon, personal mobility needs and imminent scrapping policy the industry is confident of outlook beyond Q2FY22. The demand is expected to improve swiftly as and when pandemic is brought under control. Though commodity prices are on the rise, the price increase by industry players as well as cost pruning efforts will reduce the impact on margin. The margin will get further boost with increase in capacity utilisation on higher volumes.