Maruti Suzuki profit leaps 47.8% on record sales

India’s largest carmaker Maruti Suzuki India Ltd posted its strongest ever year in FY24 in terms of sales volumes and revenues, on the back of a boom in the utility vehicle segment.  The company’s fortunes were also helped by the steadying in raw material prices.

However, while net profit for the January-March quarter (Q4FY24) at Rs 3,877.8 crore, was 47.8% higher than the same period last year, it marginally fell short of analyst estimates of Rs 3,897 crore.

The company’s board of directors also recommended the highest-ever dividend payout of Rs 125 per share for FY24 compared to Rs 90 per share in FY 2022-23.

The company, in which Japan’s Suzuki Motor Corp holds a 58.19% stake, sold 13.4% more cars in the fourth quarter or 5.84 lakh of them (including export of 78,740 units). Material cost as percentage of sales dropped 190 basis points to 74.2%, as per the earnings statement released on Friday.

Maruti Suzuki attributed the rise in profit to “improved capacity utilisation, cost reduction efforts, softening of commodity prices, improved realisation and higher non-operating income.”

During the quarter, the company registered net sales of Rs 36,697.5 crore against Rs 30,821.8 crore in the same period of the previous year. For the full fiscal year (FY24), the company reported a 64% jump in net profit to a record Rs 13,209.4 crore. Sales were up 20% to Rs 1.35 lakh crore for the year. During the year, the firm sold 2 million cars.

The numbers “represent the company’s highest ever unit sales, net sales, and net profit both for the quarter and the financial year,” Maruti Suzuki Chairman RC Bhargava said in the post-earnings media briefing.

The share of utility vehicles (which include SUVs) in overall sales was 36% in Q4, up from 24% in the corresponding period of FY23.

Looking ahead, Bhargava said that SUVs will continue driving sales for the company in FY25.

“To think that the entry level hatchback market will rebound in FY25 is optimistic. Small car sales may not rebound in calendar year 2025 as well. SUVs will continue to dominate sales,” Bhargava said.

Bhargava said that the company is on track to start production of its first electric vehicle in the current fiscal. “As far as EV is concerned, we will start production in this financial year. We have a commitment to export the first lot of cars to Europe. 

The domestic market may not see (Maruti’s) EV cars in reasonable numbers this financial year. Maybe in the next fiscal year (FY26),” he said.