Beating market expectations, India’s largest car manufacturer Maruti Suzuki India Ltd on Monday reported a 60.5% year-on-year jump in fourth-quarter net profit to Rs 1,284 crore, on the back of higher sales and favourable foreign exchange rates.
The news sent the company’s share prices up 3.02% to Rs 3,646.70 on the Bombay Stock Exchange.
Analysts had expected the company to post a net profit of Rs 1,050 crore during the quarter.
A 6.7% growth in overall vehicle sales at 346,712 units saw the company’s revenues grow 12.3% to Rs 13,272 crore during the January-March quarter, against Rs 11,818 crore last year.
“The main reason for increase in profit has been partly higher volumes. To a large extent what has helped is lower material cost and favourable foreign exchange, as well as lower commodity prices,” said RC Bhargava, chairman, Maruti Suzuki India.
Subdued raw material prices also boosted the firm’s operating margin, which improved to 15.88% during the quarter from 10.63% last year. Improved demand for cars and new launches such as Celerio and Ciaz saw better average realisation per vehicle at Rs 3.82 lakh (up 5.23%) and helped Maruti contain its discounts.
For the full financial year (2014-15), net profit grew 33.4% to Rs 3,711.2 crore, while all-time high sales of 1,292,415 units (up 11.9%) saw the company achieve its highest-ever revenue of Rs 48,605.5 crore (up 14%) in 2014-15.
Maruti has also announced a dividend of 500% at Rs 25 per share on a face value of Rs 5 per share in 2014-15. The car maker is looking to grow at 10-11% in 2015-16.
“Our estimate is 10-11% growth in volume terms for the current fiscal. Fuel prices and inflation are low, but a reason of concern is the sluggish economy,” Bhargava said. “We will also enhance our rural market penetration by 25,000 villages.”