Maruti Suzuki Profit Misses Estimate as Costs Squeeze Margins

Maruti Suzuki India Ltd. reported lower-than-expected quarterly profit, as rising input costs and a higher share of small car sales weighed on profitability at India’s largest carmaker.

Net income declined 27% to 24.1 billion rupees ($253 million) for the three months ended September, according to an exchange filing Tuesday. That fell short of the 29.29 billion-rupee average of blockyst estimates compiled by Bloomberg.

Revenue at the Indian unit of Suzuki Motor Corp. rose 26% to 533.4 billion rupees during the period but also trailed estimates. Total costs jumped 30% to 506 billion rupees, with raw material costs surging 48% from the same quarter last year.

The result suggests that pressure from raw-material costs, a less favorable product mix and higher depreciation from new capacity additions outweighed benefits from a stronger vehicle demand.

Investors are awaiting management commentary on whether recent price increases and a richer mix of utility vehicles can help support margins in coming quarters. Discretionary spending in the world’s most-populous nation is also expected to face a squeeze in the coming months after India’s inflation accelerated to an almost two-year high last month.