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  • Why Maruti Suzuki shares fell post August sales data

    Publish Date: September 03, 2018

    The share price of Maruti Suzuki, India’s largest car manufacturer saw a decline after it posted its sales numbers for August 2018. The share price fell by Rs 220 (or 2.42%) to Rs 8,896 at the end of trading on Monday. Here’s why the company’s share price took a tumble.

    Low numbers for the month

    The company reported a 3.36% decline in sales numbers to 158,189 units for August 2018. It had sold as many as 163,701 units during the same period last year. Domestic sales were down by 2.8% while exports fell by as much as 10.4% during the month.

    Sales decline unexpected

    The company was expected to report muted sales growth for the month as per analysts’ projections. However, the decline in sales was not anticipated especially since Maruti Suzuki had recently introduced facelifts of its popular models like the Ciaz, DZire compact sedan and the Swift hatchback.

    Kerala flood impact

    Maruti Suzuki gets around 8% of its retail sales from Kerala and the floods seemed to have a negative impact on sales according to a report by Livemint. The company cited “severe floods in Kerala and heavy rains in other parts of the country” as the main reason for the poor numbers during the month.

    Other auto stocks witness rise in share price

    Auto stocks in general witnessed a rise in share price after posting robust August sale numbers. Ashok Leyland share price rose by 3.60% after posting a 27% growth in August sales. Bajaj Auto shares touched a six week high of Rs 2807.7 in intraday trading after posting a 30% rise in sales.

    Conclusion

    Poor monthly sales meant that Maruti Suzuki witnessed a poor performance in the stock market. But with the festival season coming ahead, the company is expected to post a double digit sales growth for the current financial year and maintain its leadership position according to a report by Livemint.

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