Missing street estimates, the country’s bestselling automaker Maruti Suzuki on Thursday reported a net profit of ₹1,975.3 crore in the April-June period, an increase of 27% from the year-ago period, according to its stock exchange filing. A Reuters’ poll had estimated that Maruti Suzuki was likely to report a 46% jump in stand-alone net profit to ₹2,272.7 crore for this quarter.

The market has responded negatively to the company’s first quarter results as Maruti Suzuki’s shares plummeted 3.53% on the BSE at ₹9,416.30 after the results were announced. The shares ultimately closed 3.7% lower than the previous day’s close at ₹9,396.

While Maruti Suzuki’s total revenue rose 13.6% to ₹22,459 crore in quarter ended June 2018, compared to ₹19,777 crore in June 2017, its net sales grew by 12.6%, from ₹19,364 crore to ₹21,810 crore in the same period.

Maruti Suzuki, which ranked 21 on the 2017 Fortune India 500 list, also stated that the key reasons for operating margin improvement are cost reduction efforts, lower advertisement expense and economies of scale. However, this was partially offset by higher commodity prices.

“The Company sold a total of 490,479 vehicles during the Quarter, a growth of 24.3% over the same period of the previous year. Sales in the domestic market stood at 463,840 units, a growth of 25.9%,” Maruti Suzuki said in a statement. The company’s exports stood at 26,639 units.

The automaker, best known for its hatchbacks like DZire, Baleno, Swift and WagonR, reported an operating profit was ₹2,631.3 crore on account of higher sales volume, favourable product mix however, this was partially offset by adverse commodity prices and forex rates, according to the company.

“While the operating profit increased by 59.7%, the net profit increased by 26.9% on account of lower non-operating income due to mark-to-market impact on the invested surplus, compared to last year,” Maruti Suzuki said in a statement.

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