Maruti Suzuki's Q4 Net Soars 48%, Plans 6 EVs by 2031

Key Takeaway

• Maruti Suzuki's net income surged 48% to $466 million in Q4, driven by higher SUV sales and cost reductions.
• Shares jumped 22% in the March quarter, making it a top performer and India’s largest carmaker by market value.
• Plans to double production capacity by 2031 and launch six electric vehicles, marking a significant shift towards EVs.

Quarterly Profit Surge

Maruti Suzuki India Ltd., the nation's leading car manufacturer, reported a significant 48% increase in net income to 38.8 billion rupees ($466 million) for the quarter ending March 31, surpassing the average analyst forecast of 38.39 billion rupees. This growth is attributed to a combination of higher sales volumes, favorable commodity prices, cost reduction efforts, and increased non-operating income. Despite the revenue falling short of estimates, it saw a 19% rise to 382.3 billion rupees. The company also declared a dividend of 125 rupees per share, reflecting its strong financial health.

SUV Sales Drive Growth

Maruti Suzuki's strategic shift towards manufacturing more sports utility vehicles (SUVs), crossovers, and minivans has paid off, with the company selling 642,286 utility vehicles in the year ended March 31. This move catered to the growing demand among India's middle class, making Maruti the highest seller of utility vehicles according to the Society of Indian Automobile Manufacturers. The company's focus on larger vehicles over small hatchbacks has significantly contributed to its profitability and market performance.

Market Performance and Expansion Plans

The company's shares saw a 22% jump in the March quarter, positioning Maruti as one of the top performers in the S&P BSE Sensex this year and reclaiming its status as India’s biggest carmaker by market value from Tata Motors Ltd. With domestic sales up by 12% and exports increasing by 22%, Maruti Suzuki achieved record sales of 2 million vehicles for the year ended March 31. Looking ahead, Maruti plans to double its annual production capacity to nearly 4 million cars by 2031, with substantial investments in new factories and production lines in Gujarat and Haryana.

Commitment to Electric Vehicles

Despite previously lagging in the electric vehicle (EV) market, Maruti Suzuki has outlined ambitious plans to introduce six electric vehicles by 2031, with the first launch expected by 2025. The company is also preparing to commence exports of EVs to Japan and select European countries this year. This move signifies Maruti's commitment to cleaner transportation and aligns with global trends towards sustainability.

Management Quotes

• Maruti Suzuki India Ltd.:

  "The profit boost was on account of higher sales volume, favorable commodity prices, cost reduction efforts and higher non-operating income."