Maruti Suzuki India Ltd (MRTI.NS) on Wednesday reported a 42.7% surge in its fourth-quarter profit, beating estimates as the country's biggest carmaker benefited from strong demand for passenger cars and higher margins.
The company, which has an over-40% market share in the passenger vehicles (PV) segment, posted a profit of 26.24 billion rupees ($321.2 million) for the quarter ended March 31, compared to 18.39 billion rupees a year ago.
Analysts, on average, were expecting a profit of 25.70 billion rupees, as per Refinitiv IBES data.
Maruti's results, the first among its peers, are being seen as a key indicator of private consumption in India, as the auto sector carries more than 50% weightage in calculating the country's economic growth.
Earnings before interest, taxes, depreciation and amortization, or EBITDA margin stood at 10.45%, expanding from 9.75% last quarter and 9.1% a year ago, helped by easing commodity prices and improved price realization, or the money it received for every car sold.
Relatively better sales volume led to improved capacity utilization, driving higher margins, Maruti said in a statement, adding that it saw improved price realization, as well as favorable foreign exchange.
For the quarter, the company, which is majority owned by Japan's Suzuki Motor Corp (7269.T), sold 514,927 vehicles, up 5.3% from a year ago, with utility vehicles consisting of about one-fifth of the sales.
High-margin sport-utility vehicles (SUVs) made up more than half of India's record 4 million PV sales in fiscal year 2022-23.
Maruti also said its board approved the creation of additional capacity of up to one million vehicles per year on estimated market demand including exports, adding that the existing capacity of 1.3 million units is fully utilized.
Net sales for the quarter stood at 308.22 billion rupees, rising 20.8% from a year ago.
Reuters