MSI posts record profit for FY17; Q4 net up 16%

Driven by premium models, Maruti Suzuki India today reported 36.6 per cent jump in its annual profit to a record Rs 7,511 crore for the last fiscal, while fourth-quarter net rose by 15.8 per cent.
The company's net profit in 2015-16 was Rs 5,497.2 crore.
Its net sales for 2016-17 were at Rs 66,909.4 crore, up 18.5 per cent from the previous fiscal.
Volumes for the financial year ended March 31 were up 9.8 per cent to 15,68,603 units. Of this, exports were at 124,062 units, MSI said.
The company had posted record annual profit and sales in 2015-16 as well.

The MSI board has also recommended a dividend of Rs 75 per share of face value Rs 5 for 2016-17 entailing a total outgo of Rs 2,726 crore inclusive of taxes. MSI had paid a dividend of Rs 35 per share in 2015-16.

MSI Chairman R C Bhargava said the year was in some respect challenging due to demonetisation because of which "everybody expected all bad things to happen but it did not".
There were also environmental issues with various agencies functioning in a manner which create difficulties for automobile companies to function, he added.
MSI said it was able to overcome the challenges with "growth in volumes, increase in share of the company's higher segment models, benefits due to full capacity utilisation and cost reduction efforts", all of which contributed to increase in profits.

At the same time, rise in commodity prices and adverse forex movement partially impacted the annual financial performance, it added.
MSI Chief Financial Officer Ajay Seth said the company had a total adverse foreign exchange impact of around Rs 700 crore during the fiscal.
On dividend payment, Bhargava said the company's board has approved modifying the payment policy from 18-30 per cent of profit to 18-40 per cent.
With total cash reserves of Rs 23,000 crore, he said, the company's payout for 2016-17 would be around 37 per cent of profit.
He said MSI will be using the cash reserve to enhance its sales and service network across the country, for which it has already started acquiring land.

"We have to increase our sales and service to almost two to three times the current size if the company has to double its sales to around three million which will take less than ten years," Bhargava said.
Investment on sales and service network will be in "thousands of crore", he added without specifying details.
MSI has around 2,200 showrooms and 3,200 service outlets across India.
On supplies from Japanese parent Suzuki's Gujarat plant, Bhargava said MSI has received up to 10,000 units till March and for the ongoing fiscal a total of 1.5 lakh is expected.
For the fourth quarter ended March 31, 2017, MSI reported 15.8 per cent rise in net profit to Rs 1,709 crore as against Rs 1,476.2 crore in the January-March period of previous fiscal.

Net sales during the fourth quarter of 2016-17 rose to Rs 18,005.2 crore, up 20.3 per cent against the year-ago period.
Car sales were up 15 per cent to 4,14,439 units during the quarter, the company said, adding that the exports were at 31,771 units.