The automaker’s earnings for the quarter and full financial year grew in double digits with robust improvement in vehicle volume, a richer mix of sports utility vehicles, moderation in input cost inflation, and price hikes.
26 Apr 2024 | 10098 Views | By Kiran Murali
India’s largest passenger car maker Maruti Suzuki posted a 47.8 percent on-year growth in its net profit in the fourth quarter of 2023-24 (FY24), while its profit for the full financial year jumped 64.1 percent to an all-time high. The robust growth in earnings reflects double-digit growth in vehicle volume, ...
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India’s largest passenger car maker Maruti Suzuki posted a 47.8 percent on-year growth in its net profit in the fourth quarter of 2023-24 (FY24), while its profit for the full financial year jumped 64.1 percent to an all-time high. The robust growth in earnings reflects double-digit growth in vehicle volume, higher average selling price and moderation in input cost inflation, which together boosted the automaker’s margins.
The New Delhi-based carmaker’s standalone net profit for the quarter came in at Rs 38.778 billion (Rs 3,877.8 crore), against Rs 26.236 billion (Rs 2,623.6 crore) in the year-ago period. Net profit for the full financial year 2024 totaled Rs 132.094 billion (Rs 13,209.4 crore), compared with Rs 80.492 billion (Rs 8,049.2 crore) in the financial year 2023.
Revenue from operations during the three months ended March 31 rose 19.3 percent on year to Rs 382.349 billion on the back of growth in vehicle dispatches to a record level. Price hikes on the models and a higher mix of sports utility vehicles (SUVs) and top-end variants also drove the topline during the period by boosting the average selling price.
Maruti Suzuki dispatched a total of 584,031 vehicles in the fourth quarter, up 13.4 percent from 514,927 units in the comparable period. Domestic volume grew 12.2 percent to 505,291 units, while exports rose 21.7 percent to 78,740 units on a low base. Strong momentum in utility vehicle sales helped the company offset the weakness in the mini and compact segment.
The carmaker, which had been lagging in the SUV market, improved its market share in the SUV segment to around 21 percent in FY24 from around 11 percent in FY23, with the launch of new models. Jimny, Fronx, and Invicto were launched during the last financial year and were not included in the comparable period volume.
On the profitability front, the company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin, or operating profit margin, improved to 12.3 percent from 10.5 percent in the year-ago period, as per our calculations. EBITDA, or operating profit, grew by almost 40 percent on year to Rs 46.850 billion.
Apart from higher volume and revenue, operating profit and margins were also driven by the reduction in material costs on the expense front. Material cost as a percentage of net sales declined to 74.2 percent during the quarter from 76.1 percent in the year-ago quarter.
Net profit was further boosted by a non-operating income of Rs 11.180 billion, which is an increase of 50 percent from the year-ago quarter.
Maruti Suzuki’s full financial year results, which is the highest ever, primarily reflect the company’s advancement in the SUV space, where the company had been lagging with limited models for some time. The financial year results reflect the first full year of sales of Grand Vitara. The automaker also launched three new vehicles in this segment last year – Fronx, Jimny and Invicto.
The company’s revenue from operations for the financial year rose 20 percent on year to Rs 1,409.326 billion. The full-year revenue growth was also supported by higher vehicle dispatches, a better mix of SUVs and top-end vehicles, and price hikes. Total volume increased to 2.14 million units during the year from 1.97 million units in the comparable financial year.
Volume growth was supported by the newly launched SUVs, which helped the company ride on the shift in consumer preference toward SUVs from small cars. The company was also able to produce more vehicles in the year to fulfill the huge pending order book as semiconductor supply eased gradually during the period.
Meanwhile, Maruti Suzuki’s EBITDA margin improved to 11.6 percent from 9.4 percent in FY23. EBITDA zoomed 49 percent to Rs 164.011 billion on the back of higher volume and average selling price. Moderation in the input cost pressure, in terms of commodity prices, also helped the company to increase its realization over the period.
*One billion is equivalent to 100 crore, and one million is equivalent to 10 lakhs.