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Despite a slowdown in the domestic automobile industry, Maruti Suzuki India Limited (MSIL) recorded its highest-ever quarterly profit of Rs 1,147.5 crore for the quarter ended March.
Before this, its highest quarterly profit was Rs 688 crore, recorded in the third quarter of 2009-10.
For the quarter ended March, the profits of the country’s largest automaker rose a steep 79.8 per cent, driven by a weaker yen that makes auto components it imports from Japan cheaper, aggressive cost-reduction programmes, localisation efforts and strong demand for models such as the Swift, Swift DZire and Ertiga. In the corresponding quarter last year, the company’s profit stood at Rs 639.84 crore. Net sales rose 9.4 per cent to Rs 12,566.6 crore, compared with Rs 11,486.4 crore in the year-ago period. The company’s sales volume declined 4.6 per cent to 343,709 units during the quarter.
Ajay Seth, chief financial officer of MSIL, said, “The increase in net profit during the quarter was due to many factors. These included higher average realisation from sales of new models such as the Ertiga, DZire and Swift, ongoing cost reduction and localisation efforts, price increases on our products and benefits from a favourable exchange rate.”
Maruti Suzuki had raised prices by about one per cent in January, and this had an impact on the company’s net profit for the quarter.
The yen declined 9.1 per cent in the quarter versus the rupee, according to data compiled by Bloomberg.
The markets responded favourably to the result, with the shares of Maruti Suzuki ending at an all-time high closing price of Rs 1,673.5 a piece, up by 5.3 per cent, on BSE.
For the year ended March, MSIL’s net profit rose 40.7 per cent to Rs 2,300 crore, against Rs 1,635.1 crore in the previous financial year. While net sales rose 21.4 per cent to Rs 42,122.9 crore from Rs 34,705.9 crore in 2011-12, total vehicle sales increased 3.3 per cent to 1,171,434 units from 1,133,695 units in 2011-12.
Kenichi Ayukawa, managing director and CEO, said, “Maruti has been a market leader for the last 30 years and I would like that to continue. At the same time, I would also like to write a new page in the history of the company.”
The board of directors today recommended a dividend of 160 per cent for 2012-13 — Rs 8 a share of face value of Rs 5.
| Quarterly Numbers | Q4 FY12 | Q4 FY13 | % Change |
| Net Profit | Rs 639.84 crore | Rs 1,147.50 crore | 79.8 |
| Net Sales | Rs 11,486.4 crore | Rs 12,566.6 crore | 9.4 |
| Volume Sales | 3,60,334 | 343,709 | -4.6 |
| Fiscal Numbers | FY12 | FY13 | % Change |
| Net profit | Rs 1,635.1 crore | Rs 2,300 crore | 40.7 |
| Net Sales | Rs 34,705.9 | Rs 42,122.9 crore | 21.37 |
| Volume Sales | 1,133,695 | 1,171,434 | 3.3 |
Shinzo Nakanishi, former managing director and chief executive officer, MSIl said, “The year 2012-13 was a challenging year for the entire auto industry due to a weak economy and poor consumer demand. However, we were able to improve our sales and also increase our market share in the passenger vehicles segment to 39.1%."
He added demand for small cars during the year went down due to the overall economic situation. "The industry saw a decline of 13% in small cars sales, this was not a case of customers shifting to big cars. It is just that small car customers are not buying while big car buyers continue to buy," Nakanishi said. Despite the short-term concerns Nakanishsi remained bullish about long-term growth prospects of the Indian automobile market.
The board has also approved merging of seven subsidiaries dealing with insurance operations of the company with itself. This would add cash reserves of Rs 200 crore to the books of MSIL. In 2012-13, engine maker Suzuki Powertrain India Ltd (SPIL) was merged with MSIL. After considering the performance of SPIL, MSIL's net profit during the fourth quarter stood at Rs 1,239.6 crore, while the net sales were Rs 13,056.3 crore.
After combining the figures of SPIL, Maruti Suzuki posted net profit of Rs 2,392.1 crore for 2012-13 and net sales of Rs 42,612.6 crore last fiscal.
