Maruti Suzuki India (MSIL) on Wednesday reported a 42 per cent year-on-year (YoY) increase in net profit at Rs 2,670 crore in the quarter ended March 31, 2023, The increase in net profit is due to the recovery of sales and the ease of supply chain disruptions . For the full year (FY23), the company’s bottom line more than doubled to Rs 8,211 crore from the year earlier . Maruti Suzuki also announced its new plant setup to increase its annual production capacity to 1 million units . Chairman R C Bhargava , told reporters that the company’s board was yet to decide on the location and necessary investment for the plant .
Another plant in Kharkhoda, Haryana, with a proposed capacity of 1 million units, is already under construction and soon will finish the construction . With the board approving one more on Wednesday, the company plans to have a total annual manufacturing capacity of 4.25 million units. Bhargava said the company would not borrow to construct the new plant, but would use its internal resources.
The company had cash reserves of more than Rs 45,000 crore as of April 1, 2023. “The Kharkhoda plant’s construction will be completed ahead of the new plant, wherever it comes up,” he noted .
On investments needed for the new plant, he said, “If the Kharkhoda plant is going to cost X, the new plant will cost slightly more than X, because it will come a bit later. It can’t be very much different.” MSIL had stated in May 2022 that it would invest about Rs 18,000 crore to set up the Kharkhoda plant. Bhargava said MSIL’s total revenues in FY23 had crossed the landmark Rs 1-trillion mark. “I can’t readily think of many other Indian companies that have done it,” he added.
The total income surged was 33% that is around 1.19 trillion for the year 2023 . while it rose 20.6 per cent to Rs 32,802 crore in the March quarter
Bhargava said that the compnay could not meet the target of selling 2 million units in the last fiscal year 2022 mainly because of shortage of semiconductor chips . “In 2023-24 (FY24), the shortage will remain. The kind of improvement we were hoping for has not happened. Q1 of FY24 has been worse as compared to the previous quarter (Q4 of FY23) when it comes to the chip supply. Hopefully, the situation will be better in the next three quarters of FY24,” he added . He said the company’s loss of production due to chip shortage was about 170,000 units in FY23. “It should be less than 170,000 in FY24 as we are expecting a better supply situation this fiscal year,” he mentioned .
The Maruti chairman said the company had planned a capital expenditure of about Rs 8,000 crore in FY24, as against Rs 6,329 crore in FY23. He said the company would launch a hybrid vehicle this year, and this model would be sourced from Toyota. Since this will be a top-of-the-line vehicle, MSIL does not expect its volumes to be large.
In 2018, the two Japanese companies, Toyota Motor Corp and Suzuki Motor Corp, signed a global agreement that involved sharing and cross-badging of models and technologies.
MSIL’s domestic market share, in terms of volumes, stood at 41.3 per cent in FY23. Bhargava said the company intended to get close to the 50 per cent target, but it was difficult to predict when it would happen.
In FY23, the company witnessed an 8.8 per cent increase in exports, reaching 258,333 units. Bhargava is optimistic that the company’s exports could reach 750,000 units by 2030. He said the sales in FY23 were much better despite multiple headwinds such as the Ukraine-Russia war, rising inflation, and chip shortage.
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