Maruti Suzuki Q4 net profit up 16% to `1,709 crore

Carmaker earmarks `4,500 cr capex for FY18; 4.14 lakh vehicles sold in Q4

‘GROWTH IN VOLUMES’

BASED ON “growth in volumes, increase in share of the company’s higher segment models, benefits due to full capacity utilisation and cost reduction efforts,” Maruti Suzuki India Limited (MSIL) on Thursday reported a 15.8 per cent rise in net profit to Rs 1,709 crore for the fourth quarter of 2016-17. For FY17, MSIL posted net profit of Rs 7,511 crore, up 36.6 per cent, from Rs 5,497.2 crore in the previous fiscal.

The country's largest carmaker on Thursday also announced that MSIL has earmarked Rs 4,500 crore for capex (capital expenditure) purposes in the current financial year. "Capex for this year (2017-18) is Rs 4,500 crore," MSIL chairman RC Bhargava said. The amount would be spent on various activities including replacement of machinery, R&D and marketing initiatives, he added.

The company sold 4.14 lakh vehiclesinq4fy17,agrowthof15 per cent over the year-ago period. Out of 4.14 lakh vehicles, 31,771 units were exported. The company’s net sales for Q4 stood at Rs 18,005.2 crore, a growth of 20.3 per cent over the year-ago period.

According to MSIL, the Q4 growth as well as the annual growth was possible because of “increase in share of company's higher segment models” and various other aforementioned factors. However, the company stated that the Q4 growth as well as the annual growth was partially offset by "increase in commodity prices and adverse forex movement". The MSIL board also recommended a dividend of Rs 75 per share of face value Rs 5 for 2016-17, entailing a total outgo of Rs 2,726 crore inclusive of taxes. MSIL had paid a dividend of Rs 35 per share in 2015-16. The company had posted record annual profit and sales in 2015-16 as well.

Bhargava said the year was, in some respect, challenging due to demonetisationbecauseofwhich "everybody expected all bad things to happen but it did not". Therewerealsoenvironmentalissues with various agencies functioning in a manner which create difficulties for automobile companies to function, he added.

The firm sold 15.68 lakh vehicles in 2016-17, demonstrating a growth of 9.8 per cent. Approximately 8 per cent of all the vehicles were exported. The carmaker reported net sales of Rs. 66.9 thousand crore in 201617, a growth of 18.5 per cent over the same period last year.

On dividend payment, Bhargava said the company's board has approved modifying the payment policy from 18-30 per cent of profit to 18-40 per cent. With total cash reserves of Rs 23,000 crore, he said, the company's payout for 2016-17 would be around 37 per cent of profit. He said MSIL will be using the cash reserve to enhance its sales and service network across the country, for which it has already started acquiring land. "We have to increase our sales and service to almost two to three times the current size if the company has to double its sales to around three million which will take less than ten years," Bhargava said.