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The country's largest car maker has attributed the jump in profit to improving consumer sentiment, weaker yen, higher realization and lower raw material cost.
Net profit stood at Rs 800 crore in the corresponding quarter previous fiscal year. Analysts had expected Maruti's net profit between Rs 1,050 crore and Rs 1,350 crore for the quarter under review. Its annual profit stood at Rs 2,783.05 crore in 2013-14.
"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 from lower commodity prices," said Maruti Suzuki India Chairman R C Bhargava.
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Maruti's revenue increased by 12.3% to Rs 13,272 crore during the quarter under review, from Rs 11,818 crore for the fourth quarter of 2013-14.
Operating profit margin was up by 551 basis points to 15.88% during the January-March 2015 quarter as compared with 10.63% in the corresponding quarter previous year. Maruti has said that the main reason for increase in margin was drop in raw material cost as percentage of sales by about 5.5 percentage points (from 73.31% to 67.69%).
Average realisation per vehicle also increased by 5.23% (year-on-year) to Rs 3.82 lakh in January-March quarter from Rs 3.63 lakh for the corresponding quarter previous year, backed by new launches and lower discount. The company sold 3.46 lakh cars during January-March 2015 period, up 6.72% over the year-ago quarter.
The company has also declared highest ever dividend for the quarter. The company said its Board of Directors recommended a dividend of 500%, Rs 25 per share of face value Rs 5 for 2014-15. The dividend in 2013-14 was at 240%, Rs 12 per share of face value Rs 5.
Speaking on the outlook for the next year, Bhargava said, "Our estimate is 10-11% growth in volume terms for current fiscal. The environment, fuel prices are low, inflation is low but a reason of concern is the sluggish economy,"
Rate of royalty that Maruti pays to its parent Suzuki has also come down because of favourable foreign exchange rate. In 2014-15, total royalty paid Rs 2,788 crore, which is 5.7% of net sales. In 2013-14, it was Rs 2,604 crore, 6.1% of net sales.
Bhargava said while the company has been extending its rural reach, it needed to boost it further. "We are at present in 1.25 lakh villages, we would like to add another 25,000 villages this year. Rural market wasn't so good last year but we went up in our share of rural sales to 35% of total sales from 32% earlier," he added.
Speaking on export markets, Managing Director & CEO Kenichi Ayukawa said that the company was looking to maintain last year's level of 1.21 lakh units. "Africa and Middle East have been good and we managed exports of one lakh cars in non-EU countries," he added.
Shares of Maruti Suzuki India ended the day (Monday) at Rs 3,646.70 per scrip, up 3.02% from the previous close on the Bombay Stock Exchange (BSE).
