The company's domestic sales increased 7.7 per cent during the month to 127,999 units as against 118,895 units in March 2016.
For 2016-17 fiscal, the company posted a 9.8 per cent jump in total sales at 15,68,603 units, against 14,29,248 vehicles in 2015-16.
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Its domestic sales rose 10.7 per cent at 14,44,541 units during the last fiscal as compared to 13,05,351 during the 2015-16 financial year.
In March, sales of mini segment cars, including Alto and WagonR, declined 15.6 per cent to 30,973 units from 36,678 units in the year-ago month, MSI said in a statement.
The company said sales of the compact segment comprising Swift, Estilo, Dzire, Baleno and Ignis increased 29.7 per cent to 60,699 units in March this year as against 46,786 units in the same month last year.
Sales of compact sedan Dzire Tour declined 63.1 per cent during the month under review at 1,166 units as against 3,161 units in March 2016.
Sales of mid-sized sedan Ciaz declined 10.3 per cent to 4,918 units during the month.
The company said sales of utility vehicles, including Ertiga, S-Cross and Vitara Brezza, rose 31.8 per cent to 18,311 units in March this year from 13,894 units in the corresponding month last year.
Sales of vans Omni and Eeco declined 9.8 per cent to 11,628 units last month as compared to 12,896 units in the same period of the previous year.
Exports during the month rose 12.6 per cent to 11,764 units as compared to 10,450 units in March last year, MSI said.
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