Country’s largest car maker Maruti Suzuki beat Street expectations on Thursday with the second quarter net profit rising 28.8 percent to Rs 863 crore against Rs 670.2 crore (Y-o-Y) led by other income and higher revenue.
"Growth in domestic sales and cost reduction initiatives contributed significantly to bottomline growth during the quarter," said the company in its filing.
Revenue grew by 17.5 percent to Rs 12,304 crore in the quarter ended September 2014 compared to Rs 10,468.1 crore in same quarter last year driven by higher sales volumes.
Addressing the media, RC Bhargava, Chairman, Maruti Suzuki India Ltd, said the industry has seen a 10 percent swing over the last one year. “The industry as a whole last year had declined by 6 percent and this year, it is plus over 4 percent, which is not as bad as everybody might think,” he said.
According to Bhargava, Maruti has seen a better half so far with the company growing by about 17 percent since last year. The car maker has gained a market share of 4.5 percent in wholeasale terms and 5 percent in retail terms, he said.
Though he doesn’t see the H2 growth to be as strong as H1FY15 as the “industry is still in minus (growth) without Maruti”, he expects FY15 sales volume growth at around 10 percent.
Moreover, the company board has also decided to recommend an increase in the FII limit to 40 percent. The decision is subject to approval in general meeting and subsequently request to RBI for notification. Maruti's FII limit is restricted to 24 percent, which was reached about a 1.5 year ago.
Maruti is also planning to review the dividend guidelines, wherein it is looking at dividend payout ratio in the range of 18-30 percent against 10-15 percent depending upon the consistency of profits, availability of cash and requirement of the capex of the company, Bhargava said.
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