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Boosted by higher sales of premium models Brezza and Baleno, the country’s largest car maker, Maruti Suzuki India Ltd, on Thursday reported a 16 per cent increase in its net profit for the fourth quarter ended March 31.
Net profit rose to ₹1,709 crore during the quarter against ₹1,476 crore in the same quarter last year. Total income during the quarter also rose to ₹21,196 crore, up 19 per cent, against ₹17,775 crore in the year-ago period.
However, profit margins were slightly below analysts’ expectations, and market experts said this was due to the higher material cost.
The company said it would continue to grow on the back of capacity addition in Gujarat, an uptick in rural demand, supporting macro tailwinds such as the Seventh Pay Commission payout, falling interest rates, urbanisation and a growing middle class.
The company sold 4,14,439 vehicles (against 3,60,402 units) during the quarter, an increase of 15 per cent.
For the entire year (2016-17), Maruti posted a net profit of ₹7,511 crore (₹5,497 crore), a jump of 37 per cent. Net sales were also up 18 per cent at ₹66,909 crore, over 2015-16.
Sales volumes also rose 10 per cent during the year to 15,68,603 units, of which exports were at 12,4,062 units, the company added.
The Maruti Board has recommended a dividend of ₹75 per share of face value ₹5 for 2016-17. Dividend for 2015-16 stood at ₹35 per share of face value of ₹5 each.
Investment plans Meanwhile, Marutihas earmarked ₹4,500 crore in investment for capacity expansions for the current financial year. “Capex for this year (2017-18) is ₹4,500 crore,” said Chairman RC Bhargava, adding that the amount would be spent on various activities, including replacement of machinery, R&D and marketing initiatives.
Marutiplans to invest ₹700 crore to ₹1,000 crore on R&D alone, he said.
A part of the capital expenditure could also go towards acquisition of land for expansion of the sales and service network, Bhargava said.
“There will be no monetary restrictions on implementing the programme for building the sales and service network,” he added.
The company’s shares closed at ₹6,371.15 on the BSE on Thursday, down 0.56 per cent from the previous close.
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