Maruti Suzuki’s Q4 profit up 10%, market share touches 50% mark
India’s largest carmaker Maruti Suzuki India Ltd (MSIL) reported a 10 per cent rise in net profit at Rs 1,882.1 crore for the March quarter, despite a three per cent rise in effective tax rates.
Published: 28th April 2018 01:45 AM | Last Updated: 28th April 2018 03:04 AM | A+A A-
Maruti Suzuki India Chairman R C Bhargava with CEO Kenichi Ayukawa announcing the financial results in New Delhi on Friday | pti
NEW DELHI: India’s largest carmaker Maruti Suzuki India Ltd (MSIL) reported a 10 per cent rise in net profit at Rs 1,882.1 crore for the March quarter, despite a three per cent rise in effective tax rates.
During the last financial year, MSIL’s tax expense stood at Rs 3,281.6 crore as compared to Rs 2,610.1 crore in 2016-17, up by 25.7 per cent.The company had posted a net profit of Rs 1,710.5 crore during the corresponding quarter of the previous year.
According to MSIL Chairman RC Bhargava, “the effective tax rates went up by about three per cent” compared to the previous year. “So, instead of 26 per cent earlier, it has gone up to 29 per cent, ” he noted, adding that other factors like an outgo of around Rs 255 crore for resolving a land issue and higher commodity prices impacted margins.Higher commodity prices have actually seen the company shell out an extra Rs 700 crore during the 2017-18 financial year on various purchases including steel and aluminium.
Despite these hits to profitability, the company’s sales remained on a steady growth path. Net sales during the reported quarter rose to Rs 20,594.3 crore, up 14.4 per cent against the year-ago period. For the full year ending March 31, the company posted its highest ever annual net profit of Rs 7,721.8 crore, up 5.1 per cent from Rs 7,350.2 crore in the previous year.
Net sales in 2017-18 stood at Rs 78,104.8 crore, up 16.7 per cent from 2016-17.“Despite all this, we have done better during the year (2017-18) in all aspects. Our market share has gone up 2.7 per cent to 50 per cent in the passenger vehicle segment,” Bhargava said.He added that the company was also able to post a double digit growth of 14.5 per cent during 2017-18.
New royalty formula
Bhargava said a new royalty payment formula has been approved, which would result in lower royalty payment outgo for the company. Under the new formula, royalty would be calculated in rupee terms and there would be a discount on the royalty after a certain volume and the expenses done by MSI in product development would also be reimbursed.
