Maruti Jan-March net dips 11.7%; first fall in two years
Maruti Suzuki on Tuesday reported its first decline in profit in eight quarters with an 11.7 per cent dip in the period ended March 31, 2016 due to Jat quota agitation in Haryana and higher expenses although it posted a record profit in 2015-16 fiscal.
The company’s net profit for the fourth quarter of 2015-16 stood at Rs 1,133.6 crore as against Rs 1,284.2 crore in the same period of the previous financial year. The last time the company had recorded a decline in its net profit was in the fourth quarter of 2013-14. “Loss of over 10,000 units due to reservation agitation, increased advertising expenses and lower other income slightly impacted profits during the quarter,” the company said.
Launch of new models such as premium hatchback Baleno and SUV Vitara Brezza led to increase in advertising spend, it added. Net sales during the January-March quarter of 2015-16, however, rose to Rs 14,929.5 crore, up 12.5 per cent against Rs 13,272.5 crore in the same period of 2014-15.
Car sales in the quarter were up 3.9 per cent at 3,60,402 units, the company said, adding that exports were at 27,009 units. During the quarter, the company’s total expenses were at Rs 13,716.5 crore as against Rs 12,120.5 crore in the year ago quarter, up 13.16 per cent. For the full fiscal ended March 31, 2016, MSI posted its highest ever annual net profit at Rs 4,571.4 crore, up 23.2 per cent from Rs 3,711.2 crore in the previous fiscal. The previous highest net profit was Rs 3,711 crore in FY15.
Commenting on the company’s performance, MSI Chairman RC Bhargava said: “..we were able to meet our targets despite somewhat subdued overall economic climate, we were able to do what we set out to do in the fiscal.”
Volume sales in the 2015-16 were at a record 14,29,248 units, up 10.6 per cent from 12,92,415 in 2014-15, which was also a record for the company then. Discounts for the fiscal were at an average of Rs 19,000 for each model, which was the same as the previous year. For the fourth quarter of 2015-16, it was at Rs 17,577 which was higher from Rs 15,116 in the year-ago period, MSI CFO Ajay Seth said.
Royalty for the year stood at 6 per cent of net sales for the fiscal while for the quarter it was at 6.3 per cent, he added. For 2014-15 royalty was 5.7 per cent.