Maruti Suzuki approves 1 million units in fresh capacity, company crosses Rs 1 lakh crore in turnover for the first time ever
Despite disruptions in the supply chain, Maruti Suzuki, the country’s largest car maker has posted its highest-ever volumes, exports, turnover, and profits in FY23. The company for the first time ever, breached a turnover of Rs 1 lakh crore.
Given the expected rise in volumes on account of new SUVs and the potential of increased exports the company has in principle approved the capacity of 1 million units.
The commissioning of one million units incremental capacity is in addition to the 1 million units capacity that is coming up at Kharkhoda, Haryana. Specific decisions on location, investment, and other details are yet to be finalised, said R C Bhargava, Chairman of Maruti Suzuki.
Maruti Suzuki will be investing Rs 8,000 crore in capex in FY24, the company informed. The company has no plans of setting up a dedicated facility for electric vehicles and Maruti Suzuki will be sourcing batteries from its mother company Suzuki for its locally produced models starting 2024-25.
“In light of the estimated market demand including exports, the board in principle approved the creation of additional capacity of up to one million vehicles per year,” the company said in a statement.
In its 40th anniversary year, despite the shortage of electronic components, the company recorded its highest-ever annual sales volume and the annual turnover of the company surpassed the Rs 1 lakh crore mark, said the company.
“The new models and product refreshers introduced during the year, especially in the Utility Vehicles segment received good market response,” Maruti Suzuki added in a statement.
During the financial year 2023, Maruti Suzuki sold a total of 1,966,164 vehicles despite missing production of about 170,000 units due to a shortage of electronic components. This translated to a growth of 19 percent over FY 2021-22 sales volume of 1,652,653 vehicles. The sales volume in the year comprised 1,706,831 units in the domestic market and the highest-ever exports of 259,333 units.
During the period, the company registered net sales of Rs 1,12 lakh crore versus Rs 83,798 crore posted FY2021-22.
It recorded an operating profit of Rs 8,184 crore in FY-23 versus Rs 2,914 crore profits it registered for FY 2021-22. The company was able to better its operating profit on account of higher sales volume, improved realisation from the market, and favourable forex movement, Maruti Suzuki said.
With this, the net profit for the year rose to Rs 8,049 crore from Rs 3,766 crore profits it registered in FY22.
Robust Q4 performance
During quarter four of FY23, the company sold a total of 514,927 vehicles, higher by 5.3 percent compared to the same period in the previous year. In the quarter, sales in the domestic market stood at 450,208 units, up by 7.1 percent over that in Q4FY22. The sales in the export market were at 64,719 units as compared to 68,454 units in Q4FY22.
The sales for Q4 rose 20.8 percent to Rs 30,821 crore, the operating profit stood at Rs 2,611 crore and the net profit was higher by 43 percent to Rs 2,623 crore on account of higher sales volume, improved realisation from the market, and favourable forex movement.
The Board of Directors recommended the highest-ever dividend of Rs 90 per share (face value of Rs 5 per share) compared to Rs 60 per share in FY 2021-22.