Country’s largest car maker Maruti Suzuki India on Monday reported its highest ever annual profit of Rs3,711.2 crore in the fiscal year ended March 31, 2015 on the back of record sales. The company, which had posted an annual net profit of Rs2,783.05 crore in 2013-14, -- its previous best-- said it expected 10-11 per cent growth in volume terms in the ongoing fiscal. Net sales in FY 2015 also stood at a record high of Rs48,605.53 crore, up 13.97 per cent from Rs42,644.76 crore in the 2013-14.
The company also recorded its highest ever volume sales in a fiscal at 12,92,415 units, up 11.9 per cent from the previous fiscal. Of this, exports were at 121,713 units, a gain of 20.1 per cent, the company said. Buoyed by the performance, the company said its Board of Directors recommended a dividend of 500 per cent, Rs25 per share of face value Rs5 for 2014-15. The dividend in 2013-14 was at 240 per cent, Rs12 per share of face value Rs5.
“The major cause 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 from lower commodity prices,” Maruti Suzuki India Chairman R C Bhargava told reporters here. Royalty rate has also come down due to favourable foreign exchange rate factor, he added.
For 2014-15, total royalty paid to parent Suzuki was Rs2,788 crore, which is 5.7 per cent of net sales. In the previous fiscal, it was Rs2,604 crore, 6.1 per cent of net sales. For the quarter ended March 31 2015, the company reported 60.5 per cent jump in net profit at Rs1,284.2 crore. The company had posted a net profit of Rs 800.05 crore in the same period last fiscal.
Higher volumes, material cost reduction initiatives, favourable foreign exchange and lower sales promotion expenses contributed to the bottom-line during the quarter, the company said. Net sales during the quarter stood at Rs13,272.6 crore, up 12.3 per cent as against Rs11,818.13 crore in the same period of previous fiscal.
Volume sales in the quarter were up 6.7 per cent at 3,46,712 units, the company said adding exports were at 29,542 units, at a growth of 12.4 per cent. On the outlook, Bhargava said: “The environment, fuel prices are low, inflation is low but a reason of concern is the sluggish economy. Our estimate is 10-11 per cent growth in volume terms for current fiscal.”
Shares of Maruti Suzuki India ended the day at Rs3,646.70 per scrip, up 3.02 per cent from the previous close on the BSE When asked about progress on the upcoming Gujarat plant,which parent Suzuki has decided to own and invest, Bhargava said work was going on at the proposed facility. “Today we have released Rs845 crore for the plant. We are still waiting for Parliament to do its job. There is no problem going to the shareholders but need clarity on the law,” he added.
last year, Maruti had decided to defer seeking minority shareholders voting on the changes proposed in the ownership of the plant following amendment to the Companies Act that is yet to be cleared by Parliament. Once the amendments come into effect, it will become easier for companies to get shareholder approvals for related party transactions. Maruti’s proposed plant transfer to Suzuki falls under this category of transactions. Under pressure from institutional investors, Maruti had decided to seek minority shareholders’ approval after tweaking some of the earlier proposals with regard to the transfer of the Gujarat plant to Suzuki.