Maruti Suzuki up nearly 7% as the automaker expects good demand at a time when industry is feeling the heat

• Shares of Maruti Suzuki surged 7% on Tuesday after the automaker said that there is no lack of demand and has 2.4 lakh pending vehicle orders.
• However, the profitability of the vehicle manufacturer crashed almost 50% year-on-year due to semiconductor shortage.
• The expectation of good demand is a positive signal at a time when passenger car sales in India have been falling for four months in a row since September.

A promising demand outlook by India’s largest car manufacturer Maruti Suzuki cheered up investors as shares of the company rallied nearly 7% on January 25, after the company announced its December quarter earnings.

The automaker said that there was no lack of demand as the company had more than 2.40 lakh pending customer orders at the end of the December quarter.

Besides, the company also hoped to increase production in the next quarter if not reach full capacity.

The commentary of good demand from India’s largest carmaker is a positive sign for the industry that is currently struggling with poor sales. The passenger car sales in India have been falling for four months in a row since September.

Poor car sales have also had a ripple effect on the banking sector’s auto loans and overall economic growth pickup.

Following the announcement of the December quarter earnings, shares of the company surged 7% despite the company reporting almost 50% fall year-on-year in net profit.

However, the revenue and profit growth numbers have improved sequentially.

On Tuesday, shares of the company closed 4.88% higher at ₹8,444.95 per share.

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