On the back of a series of new launches in the sports utility vehicle space, India’s largest passenger car maker Maruti Suzuki India Ltd clocked a record turnover of over USD 16 billion in the financial year 2023-24.
Not just in turnover, FY24 was a record year for Maruti Suzuki in volume, exports, and profit as well. The carmaker capitalized on the consumer demand for SUVs and the softening of commodity prices to boost volume and profit.
The automaker surpassed the annual total sales milestone of 2 million units for the first time. It could ramp up production during the year as chip supply stabilized, helping it cater to the massive order backlog and almost double its SUV market share.
After posting the record earnings, Maruti Suzuki also gave a reason for its shareholders to cheer by announcing its highest-ever dividend of Rs 125 per share for the financial year, up from Rs 90 per share in the year before that.
“We had the highest turnover. We had the highest absolute numbers in terms of profits. Therefore, it has been an excellent year,” Maruti Suzuki Chairman RC Bhargava said today while speaking to reporters after announcing the company’s earnings.
Maruti Suzuki’s net sales in FY24 totaled Rs 1,34,937.8 crore, or USD 16.2 billion, with a growth of 20 percent on year. Net profit jumped 64 percent to Rs 13,209.4 crore, or USD 1.59 billion. Bhargava attributed the record numbers largely to the increase in production and moderation in commodity cost inflation.
“Thanks largely to the increase in production. The fact that we did not have any of the constraints to production that have been with us for the last 2-3 years, the fact that the material prices remained somewhat benign for the period, that the company had a record in terms of the suggestions implemented and the savings resulting,” he said.
Maruti Suzuki sold a total of 2.14 million vehicles during the financial year, which represents a growth of 8.6 percent from the year before that. This was driven by buoyed demand in the domestic market as well as record exports. Volume in the domestic market stood at 1.85 million units while it exported 283,067 units.
Despite strong demand for vehicles, the company was forced to cut its production in the last couple of years due to a shortage of chips. However, the supply constraints eased gradually and Maruti Suzuki did not have a considerable impact on its production plans.
“For the first time, Maruti Suzuki, excluding Gujarat, between Gurgaon and Manesar, we crossed 1 million. That is something which we had not done ever before. This is reflected in the results. So, it does happen sometimes – several factors that affect the bottom line all come together,” Bhargava said.
At the start of FY24, the automaker’s pending order book stood at around 380,000 units. Better availability of chips helped the company ramp up its production during the previous financial year to cater to the massive order backlog. The pending order book has now almost halved.
The major highlight in FY24 for Maruti Suzuki was its SUV portfolio. The company had been lagging behind its peers in the SUV space with limited offerings when consumer preference started shifting to SUVs from small cars.
However, in FY24, Maruti Suzuki had a portfolio of five models. The automaker launched Fronx, Jimny and Invicto last year, and also had the first full year of sales for Grand Vitara.
This helped the company ride on the shift in consumer preference and improve its market share in the SUV segment to around 21 percent from around 11 percent in FY23.
The impact of higher volumes, a better mix of SUVs and top-end variants, price hikes and softening of commodity price inflation resulted in robust improvement in Maruti Suzuki’s profit margins, which boosted the company’s profit to an all-time high.
Maruti Suzuki announced the results after the markets closed on Friday. The company’s shares ended trading on Friday at Rs 12,760.