New Delhi: Driven by record sales, the country's largest car maker Maruti Suzuki India Monday reported its highest ever annual profit of Rs 3,711.2 crore in the fiscal year ended March 31, 2015.
The company, which had posted an annual net profit of Rs 2,783.05 crore in 2013-14, -- its previous best-- said it expected 10-11 percent growth in volume terms in the ongoing fiscal.
Net sales in FY 2015 also stood at a record high of Rs 48,605.53 crore, up 13.97 percent from Rs 42,644.76 crore in the 2013-14.
The company also recorded its highest ever volume sales in a fiscal at 12,92,415 units, up 11.9 percent from the previous fiscal. Of this, exports were at 121,713 units, a gain of 20.1 percent, the company said.
Buoyed by the performance, the company said its Board of Directors recommended a dividend of 500 percent, Rs 25 per share of face value Rs 5 for 2014-15. The dividend in 2013-14 was at 240 percent, Rs 12 per share of face value Rs 5.
"The major cause 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," Maruti Suzuki India Chairman R C Bhargava told reporters here.
Royalty rate has also come down due to favourable foreign exchange rate factor, he added.
For 2014-15, total royalty paid to parent Suzuki was Rs 2,788 crore, which is 5.7 percent of net sales. In the previous fiscal, it was Rs 2,604 crore, 6.1 percent of net sales.
For the quarter ended March 31 2015, the company reported 60.5 percent jump in net profit at Rs 1,284.2 crore.
The company had posted a net profit of Rs 800.05 crore in the same period last fiscal.
Higher volumes, material cost reduction initiatives, favourable foreign exchange and lower sales promotion expenses contributed to the bottom-line during the quarter, the company said.
Net sales during the quarter stood at Rs 13,272.6 crore, up 12.3 percent as against Rs 11,818.13 crore in the same period of previous fiscal.
Volume sales in the quarter were up 6.7 percent at 3,46,712 units, the company said adding exports were at 29,542 units, at a growth of 12.4 percent.
On the outlook, Bhargava said: "The environment, fuel prices are low, inflation is low but a reason of concern is the sluggish economy. Our estimate is 10-11 percent growth in volume terms for current fiscal."
Shares of Maruti Suzuki India ended the day at Rs 3,646.70 per scrip, up 3.02 percent from the previous close on the BSE.
When asked about progress on the upcoming Gujarat plant, which parent Suzuki has decided to own and invest, Bhargava said work was going on at the proposed facility.
"Today we have released Rs 845 crore for the plant. We are still waiting for Parliament to do its job. There is no problem going to the shareholders but need clarity on the law," he added.
Last year, Maruti had decided to defer seeking minority shareholders voting on the changes proposed in the ownership of the plant following amendment to the Companies Act that is yet to be cleared by Parliament.
Once the amendments come into effect, it will become easier for companies to get shareholder approvals for related party transactions. Maruti's proposed plant transfer to Suzuki falls under this category of transactions.
Under pressure from institutional investors, Maruti had decided to seek minority shareholders' approval after tweaking some of the earlier proposals with regard to the transfer of the Gujarat plant to Suzuki.
When asked about the situation in the rural market, he said: At present, demand there is strong but how it will be in the year ahead is hard to predict because of unseasonal rain and there is prediction of low monsoon. Those are worries..."
Bhargava said the company is extending reach in the rural areas but "we still have a long way to go. 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 percent of total sales from 32 percent earlier," he added.
When asked about emission norms and readiness to move to Euro V, Bhargava said the company can give BS V on petrol anytime.
"In Diesel we need to put in a catalytic converter but the delay has been due to non-availability of the cleaner fuel," he added.
Bhargava said the company will increase the production of automated manual transmissions to 2 lakh units per year by end of FY16. Currently it is at 60,000 units a year.
On exports, MSI Managing Director & CEO Kenichi Ayukawa said 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, which is a small milestone for us," he added.
