Maruti Suzuki presses the pedal harder by announcing 10 lakh unit capacity expansion

Maruti Suzuki has announced new production capacity of up to 10 lakh units per year. "In light of the estimated market demand including exports, the board in principle approved the creation of additional capacity of up to one million vehicles per year," India's biggest carmaker said in a statement as it announced the fourth quarter earnings.

Currently, Maruti has a cumulative production capacity of 15 lakh units per annum at both Manesar and Gurugram plants. It additionally has access to 7.5 lakh units from parent Suzuki Motor's facility in Gujarat.

Maruti has over 40% market share in the passenger vehicles (PV) segment. In 2022-23, Maruti sold a total of 1.96 million vehicles, comprising 1,706,831 units in the domestic market and highest-ever exports of 259,333 units.

Maruti Suzuki India reported a 42.7% jump in its fourth-quarter profit, benefitting from strong demand for passenger cars and higher margins. Net profit jumped to Rs 2,624 crore for the quarter ended March 31, compared to Rs 1,839 crore in the same quarter of the previous year. Net sales for the quarter stood at Rs 30,822 crore, rising 20.8% from a year ago.

EBITDA margin improved to 10.45%, expanding from 9.75% last quarter and 9.1% a year ago, helped by easing commodity prices and improved price realisation, or the money it received for every car sold.

"The new models and product refreshers introduced during the year specially in Utility Vehicles
segment received good market response. The Company was able to better its operating profit on account of higher sales volume, improved realization from the market, and favourable forex movement," Maruti said in a statement.

For the quarter, the company, which is majority owned by Japan's Suzuki Motor Corp, sold 514,927 vehicles, up 5.3% from a year ago, with utility vehicles consisting of about one-fifth of the sales.

High-margin sport-utility vehicles (SUVs) made up more than half of India's record 4 million PV sales in fiscal year 2022-23.

The board of directors recommended highest-ever dividend of Rs 90 per share, compared to INR 60 per share in FY 2021-22.