India’s largest carmaker, Maruti Suzuki on Tuesday reported a net profit of INR 1,116 crore in Q4FY21, a drop of 9.7% from a year before figure of INR 1,241 crore. In a regulatory filing today, the company also reported that its net sales increased by 33.6% at INR 2,295.8 crore in the same period.
The company indicated that the lower profits can be attributed to rising input cost and adverse foreign exchange fluctuation.
RC Bhargava, Chairman, Maruti Suzuki said in a media roundtable, “In the last quarter, material cost went up by 3%, which was still on the higher side, when compared to the price increase we announced. So there is an overall impact on production cost.” He pointed out that precious metals are the worst hit, while prices of steel continue to go up.
In terms of sales volume, the carmaker sold 492,235 units, registering a growth of 27.78% in Q4 that ended on March 31, 2021. In comparison, the company had sold 456,707 units in the same period last year. At the same time, exports for the company stood at 35,528 units in Q4FY21.
It may be recalled that there was a significant decline in sales volume in Q4FY20, largely owing to the outbreak and increasing cases of COVID-19 infections in the country.
The operating profit for the quarter stood at INR 1,250 crore on account of higher sales volume and cost reduction efforts despite the steep commodity price increase, the company said. This was a growth of 72.8% over the same period the previous year.
Maruti Suzuki attributed the improvement in operating performance to improved capacity utilisation, lower sales promotion expenses and increase in selling prices and cost reduction efforts.
Full Year Performance
The company sold a total of 1,457,861 units during FY21, which is a drop of 6.7% compared to the previous year and a significant drop of 21.7% compared to FY19.
Last fiscal, sales in the domestic market stood at 1,361,722 units, lower by 6.8% and exports were at 96,139 units, lower by 5.9% compared to the previous year. The company added that the performance for FY21 is to be seen in the context of COVID-19 related disruptions.
Net sales registered during the period stood at about INR 66,562 crore, lower by 7.2% compared to that in the previous year. Net profit for the same period stood at INR 4,229 crore, a drop of 25.1% compared to that in the previous year on account of lower sales volume, increase in commodity prices, adverse foreign exchange movement, and lower non-operating income partially offset by lower operating expenses, and cost reduction efforts, the company said.
Sharing his outlook for the coming times, Bhargava said the company sees no production impact due to rise in COVID cases. “The situation this year is very different from the last year. We went under complete lockdown last year vis-à-vis only three states going under lockdown this year,” he said.
Note: Images are representational.