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Maruti Suzuki, the country’s largest car maker, on Friday reported a net profit of ₹800 crore for the fourth quarter ended March 31, 2014, a drop of 35.46 per cent over the same period last year (₹1,239 crore).
The decline in profit is the result of lower sales, owing to poor market conditions over the last few months.
Analysts said Maruti’s performance in the fourth quarter was below their estimates. The company posted net sales (net of excise) of ₹11,818 crore for the January-March quarter, a drop of 9.48 per cent over the same period last year. “The lowering of profit in the fourth quarter was partly due to dealer compensation due to the excise duty cut,” said Maruti Chairman RC Bhargava. The compensation to dealers worked out to ₹143 crore, he added.
The auto giant sold 325,000 vehicles during the period, against 343,000 units during the corresponding quarter last year. Maruti expects to maintain this level of sales in the current financial year as well, Mayank Pareek, Chief Operating Officer – Marketing and Sales, said. The board of directors has recommended a dividend of 240 per cent (₹12 per share with a face value of ₹5) for 2013-14, the company said.
Highest-ever annual profit For the full financial year, Maruti’s consolidated net profit rose 15.53 per cent to ₹2,852.92 crore, its highest ever, against ₹2,469.28 crore in 2012-13.
The previous highest annual profit was in 2009-10, when it posted earnings of ₹2,497.6 crore. “Overall, despite a declining market, we increased annual profit on the back of cost reduction and localisation initiatives, together with favourable foreign exchange,” said Bhargava.
“Maruti’s fourth quarter operating performance was below our estimates, with EBITDA margins at 10.3 per cent. We expect margins to revert to 12 per cent-plus levels from the first quarter of this year,” Surjit Arora, Research Analyst, Institutional Equities, at Prabhudas Lilladher, told Business Line .
The company’s shares closed at ₹1,956.05 on the BSE on Friday, down 1.35 per cent from the previous close.
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