Maruti Suzuki’s Q4 profit dips 12% on production loss, higher costs

India’s largest carmaker Maruti Suzuki today reported a 12% decline in its net profit for the quarter ended March 31 at Rs 1,133 crore, as the loss of over 10,000 units due to the Jat reservation agitation, increased advertising expenses and lower other income weighed on the company during the quarter.

The dip in quarterly profit is the first for the company in over two years and has come despite a 3.9% rise in total sales volume to 360,402 vehicles in Q4. Out of this, exports stood at 27,009 units.

The company’s net sales during the quarter stood at Rs 14,929 crore, with a growth of 12.5 per cent over the same period in the previous year.

Meanwhile, during the financial year 2015-16, the company sold a total of 1,429,248 vehicles in with a growth of 10.6%. Of this, exports stood at 123,897 units.

During the fiscal, the company reported net sales of Rs 56,350 crore with a growth of 15.9% over the same period last year. Net profit rose 23.2% to Rs 4,571 crore.

According to the company, higher volumes aided by successful new model launches, network expansion, lower raw material cost and continued cost reduction initiatives led to growth in profits during the year.

Maruti Suzuki launched three new models during the last fiscal – the S-Cross, Baleno and Vitara Brezza –along with an all new premium sales channel called Nexa. While the Baleno became an instant hit in the premium hatchback segment, the S-Cross has received tepid response. The recently launched Vitara Brezza has also got off to a good start and is likely to garner incremental volumes for the carmaker in the current fiscal, alongside the Baleno RS and the Ignis, which are scheduled to launch in the festive season this year.