Maruti Suzuki India Ltd. posted a 6.14% decline in consolidated net profit to ₹1,241.1 crore in the quarter ended March, from a year earlier. On Tuesday, the company also said its sales and production had so far not been impacted by the resurgence of COVID-19.
Chairman R.C. Bhargava said it was difficult to provide a sales outlook due to uncertainties related to COVID-19 as well as production constraints. The problem was not of demand, but of shortage of vehicles, he said, adding that the firm currently had pending customer bookings of more than two lakh vehicles.
The country’s largest carmaker was also ‘keeping a close watch’ on the impact of rising steel prices and government orders limiting the use of oxygen by industries, as well as the continuing shortage of semiconductors, Mr. Bhargava said during a press conference.
“We are producing at full capacity... Demand for personal mobility will strengthen further due to the second COVID wave; [demand] is not going to weaken,” he said.
Mr. Bhargava said of the about 30,000 employees of the firm, 1,280 were currently infected with COVID-19. However, this has not affected the availability of people working on the lines, he said.
‘MTM loss dents profit’
For the fourth quarter, Maruti Suzuki India’s revenue from sale of products rose 33.6% to ₹22,959.8 crore. In a statement, the company said its profit for the quarter was impacted by lower non-operating income owing to mark-to-market (MTM) loss on invested surplus.
Maruti sold more than 4.92 lakh vehicles in the quarter, higher by 27.8% from a year earlier. While domestic sales grew 26.7% to 4.56 lakh vehicles, exports rose 44% to 35,528 units. “In Q4 of [FY20], there was a significant decline in the sales... largely owing to COVID-19 lockdown,” it said.
For FY21, the company’s consolidated net profit declined 22.7% to ₹4,389.1 crore and revenue from sale of products fell 7% to ₹66,571.8 crore. It said net profit was lower on account of lower sales volume, increase in commodity prices, adverse foreign exchange movement, and lower non-operating income partially offset by lower operating expenses, and cost reduction efforts.
The company’s board has recommended a dividend of ₹45 per share for FY21.
Replying to a query, Mr. Bhargava said, “So far, sales have not been impacted. And if the situation continues, it should be a decent quarter for us... But there are factors which you have to keep watching... how COVID progresses, what kind of restrictions come, what impact they have.”
Stressing there was a shortage of supply, not demand, Mr. Bhargava said that last year, the company could have sold another 1.2 lakh units, but could not due to output constraints.
