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Maruti Suzuki declares the biggest dividend even as ad spends cap profit margin
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Tailwinds for Maruti Suzuki’s margins for the quarter were offset by higher sales promotion and higher manufacturing overheads.
Maruti Suzuki India Ltd., India’s largest passenger car maker reported a net profit of ₹3,877.8 crore during the January-March period. The number was lower than the CNBC-TV18 poll of ₹4,104 crore. On a year-on-year basis, the company’s net profit grew by 47.8%
Revenue for the quarter stood at ₹38,235 crore, a growth of 19.3% from last year, but was marginally lower, compared to the CNBC-TV18 poll of ₹38,672 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter missed expectations, coming in at ₹4,685 crore, while a CNBC-TV18 poll had pegged the figure at ₹5,178 crore.
Maruti reported an EBITDA margin of 12.2% for the quarter, 120 basis points below expectations of 13.4%. Margins for the quarter were impacted by higher ad spends and higher manufacturing overheads. However, they expanded by 170 basis points from the year-ago quarter.
Better capacity utilisation, cost reduction efforts, softening commodity prices, improved realisation and higher non-operating income tried offsetting the margin headwinds.
Raw material costs as a percentage of net sales stood at 74.4% in financial year 2024 compared to 76.5% in financial year 2023.
Sales volume for the quarter grew by 13.4% from last year to 5.84 lakh units from 5.14 lakh units last year.
Maruti Suzuki also declared a dividend of ₹125 per equity share, which is the highest in the company’s history.
Shares of Maruti Suzuki India fell 1.2% on Friday ahead of results to end at ₹12,760. The stock recently made a record high of ₹13,073 and is up 24% so far in 2024.
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