Notwithstanding slowdown in the domestic automobile industry, Maruti Suzuki India (MSI), on Friday, reported its highest-ever quarterly profit at Rs.1,147.5 crore during January-March 2013 (fourth quarter), up 79.4 per cent from the year-ago period.
The company registered a net profit of Rs.639.8 crore in the same period last year. The profits of the company were driven by higher sales of new models such as Swift, DZire and Ertiga, cost reduction programmes, localisation efforts and benefits of favourable exchange rate.
The markets responded favourably to the result with Maruti scrip closing at Rs.1,673.45 a piece, up 5.26 per cent on the BSE.
Net sales were up 9.4 per cent at Rs.12,566.6 crore against Rs.11,486.4 crore. However, MSI sold a total of 3,43,709 vehicles, down 4.6 per cent from 3,60,334 units in the same period last year.
In 2012-13, Suzuki Powertrain India Ltd. (SPIL) was merged with MSI. After considering the performance of SPIL, Maruti’s net profit during the fourth quarter stood at Rs.1,239.6 crore, while net sales were Rs.13,056.3 crore.
“The increase in net profit during the quarter was due to many factors, which included higher realisation on sales of new models such as Ertiga, DZire and Swift, ongoing cost reduction and localisation efforts, and the benefit of a favourable exchange rate,” MSI Chief Financial Officer Ajay Seth told reporters here.
This was the highest quarterly profit for MSI and the company had earlier posted its best quarterly profit in the third quarter of 2009-10 at Rs.688 crore, he added.
For the full fiscal, the company reported 46.2 per cent increase in its standalone net profit at Rs.2,392 crore against Rs.1,635.1 crore in 2011-12. Net sales went up by 21.4 per cent to Rs.42,122.9 crore, while total vehicle sales rose to 11,71,434 units from 11,33,695 units in 2011-12.
Including the effect of the merger, MSI posted a standalone net profit of Rs.2,392.1 crore for 2012-13 and net sales of Rs.42,612.6 crore for the fiscal.
“The year 2012-13 was a challenging one for the entire auto industry due to a weak economy and poor consumer demand. However, we were able to improve our sales and also increase our market share in the passenger vehicles segment to 39.1 per cent,” Maruti’s recently-retired Managing Director and CEO Shinzo Nakanishi said.
The industry saw a decline of 13 per cent in small cars sales. This was not a case of customers shifting to big cars. It was just that small car customers were not buying while big car buyers continued to buy, he added.
On the outlook for the ongoing fiscal, he said there were short-term concerns but the company was bullish on the long-term potential of the Indian market.
Kenichi Ayukawa, who took over as MSI’s Managing Director and Chief Executive Officer from April 1, said, “Maruti has been a market leader for the last 30 years and I would like it to continue and at the same time I would also like to write a new page in the history of the company.”
At its meeting on Friday, the board of Maruti recommended a dividend of Rs.8 per share of the face value Rs.5 for 2012-13. The dividend in 2011-12 was at 150 per cent.
“The total outgo on account of the dividend payment will be Rs.288 crore,” Mr. Seth said.
Review of Gujarat projects
PTI reports from Ahmedabad:
Suzuki Motor Corp Chairman Osamu Suzuki, on Friday, met Gujarat Chief Minister Narendra Modi to review the progress of the two projects in the State being set up by its subsidiary Maruti Suzuki India. Mr. Suzuki was accompanied by MSI Chairman R. C. Bhargava and Mr. Kenichi Ayukawa.
After the meeting with the Chief Minister, Mr. Bhargava told reporters that the projects were on track and were scheduled to start production from the first site by 2015-16.
MSI is planning to set up two new plants in Gujarat.The delegation is scheduled to visit the site for the proposed second plant in the State.