Shares of Maruti Suzuki India rose 5% to Rs 9,500 in intraday trade on Friday after the company reported a better-than-expected profit after tax (PAT) of Rs 2,061.5 crore for the September quarter (Q2FY23). Better sales and improved realisation contribute to profitability. Analysts expect a PAT of around Rs 1,700 crore for the quarter. The auto company posted a PAT of Rs 475 crore in the same period last year.

The stock surpassed its previous high of Rs 9,450 on September 23, 2022. It has outperformed the market over the past year, surging 30%, while the S&P BSE Sensex lost 0.1%. The stock hit an all-time high of Rs 10,000 on December 20, 2017.

The company recorded its highest-ever quarterly net sales of Rs 2,854 crore in Q2FY23, up 47.8% year-on-year compared to Rs 1,930 crore in Q2FY22. Operating EBIT increased 670 basis points year over year and 220 basis points sequentially to 7.2%.

Maruti Suzuki said relatively better volumes supported higher capacity utilisation, favourable foreign exchange changes, lower costs and higher realised margins, which supported margin expansion.

The company said it has been working to ensure the availability of electronic components, reduce costs and increase market realisation to improve profit margins.

The company said the second quarter of fiscal 2023 could not be strictly compared to the second quarter of fiscal 2022, as operating profit fell sharply in the second quarter of last year due to sharply higher commodity prices and constrained supply of electronic components.

Maruti Suzuki’s second-quarter results beat market expectations. Its new models – New Brezza, New Baleno and Vitara – have gained good traction. Analysts at Prabhudas Lilladher said pending customer orders at the end of the quarter stood at about 412,000 vehicles, of which 130,000 were newly launched models.

“The company has addressed gaps in its product portfolio with the Brezza and Grand Vitara launch. However, intense competition in the SUV segment and slow recovery in the entry-level market remain a problem. With the chip issues largely resolved, the company’s production levels have returned to almost normal levels. However, market share growth remains key for Maruti due to intense competition in the UV segment. Maruti has lost significant market share over the past few years (41% in September -2022YTD vs 51% in FY19),” the brokerage said.