Maruti Suzuki Q4 profit up 43% at Rs 2,623 cr; announces capacity addition of 10 lakh

Maruti Fronx at Auto Expo

India's largest carmaker Maruti Suzuki reported a 43 percent jump in standalone net profit at Rs 2,623 crore for the quarter ended March 2023.

The profit was, however, a tad below the Street estimate of Rs 2,773 crore. Revenue from operations grew 20 percent on-year to Rs 32,048 crore for the March quarter. The annual turnover of the company surpassed Rs 1 lakh crore.

Also Read: Maruti Suzuki recalls 7,213 units of Baleno RS model to rectify possible defect in vacuum pump

On the operating front, EBITDA (earnings before interest, taxes, depreciation and amortisation) jumped 38 percent to Rs 3,350 crore and margins improved 130 basis points on-year to 10.4 percent. Estimates had pegged EBITDA margin at 10.1 percent.

The company sold a total of 514,927 vehicles during the quarter, higher by 5.3 percent over the same period previous year. The board of directors recommended the highest-ever dividend of Rs 90 per share, as per the exchange filing.

Also Read: Maruti Suzuki drives in compact SUV Fronx at Rs 7.46 lakh

The carmaker also announced Shigetoshi Torii's resignation from the post of whole-time director designated as joint managing director.

Capacity expansion and investments

MSIL shared that it will enhance its annual production capacity by one million vehicles, following an in-principle approval from its board during the annual earnings meeting. The company stated that the move will enable it to capitalise on the anticipated growth in both domestic and overseas markets. However, specific decisions on location, investment, and other details are yet to be finalised.

"In light of the estimated market demand including exports, the board in principle approved the creation of additional capacity of up to 10 lakh vehicles per year," said the company.

The development on the capacity addition front is a big positive, as per analysts.

Maruti Suzuki has a total production capacity of 22 million units per annum across its two manufacturing plants in Haryana and parent Suzuki Motor Corporation’s (SMC) facility at Gujarat. Nearly 15.5 lakh units are rolled out from Maruti Suzuki’s plants in Gurgaon and Manesar, in addition to 750,000 units at parent Gujarat facility, every year.

It also sources the Grand Vitara from Toyota’s Bidadi facility.  It is also on course to build a capacity of 250,000 units from its new facility in Kharkhoda, Haryana, by the end of 2024, besides enhancing output by 10,000 units at its Manesar factory.

MSIL has also affirmed that it is scaling up capital expenditure to Rs 8,000 crore during current financial year. The capex earmarked for the fiscal is nearly 30 percent  higher than Rs 6,329 crore invested in the last financial year. As of March 31, 2023, MSI has a cash reserve of around Rs 45,000 crore.

Maruti Suzuki has also clarified that it has no plans of setting up a dedicated facility for EVs and will be sourcing batteries from  SMC for its e-cars beginning 2024-25.