Riding on robust domestic sales and cost reduction initiatives, Maruti Suzuki India(MSI) on Thursday reported a 28.69% increase in net profit at Rs 862.54 crore for the second quarter ended September 30, 2014-15. With an aim to please investors, the company's board on Thursday approved adopting a guideline for dividend payout ratio within the range of 18-30%, up from the average of 10-15% of net profit in the past. It also recommended an increase in the FII limit to 40% from 24% currently subject to shareholder approval and RBI nod.
The company is, however, yet to decide on a final date for the minority shareholders' voting to let parent Suzuki Motor Corp own and invest in the Gujarat plant, which has been slated to be commissioned in May-June 2017. The country's largest car maker had posted net profit of Rs 670.23 crore in the same period last fiscal. Net sales during Q2, 2014-15, stood at Rs 11,996.33 crore, up 17.47% as against Rs 10,211.83 crore in the same quarter of last fiscal.
MSI sold 3,21,898 units of vehicles during Q2, a growth of 16.80%, compared with 2,75,586 units in the corresponding year-ago period. Sales in the domestic market stood at 2,87,687 units, up 19.09% while exports were at 34,211 units, up marginally by 0.54 %.
"Growth in domestic sales and cost reduction initiatives by the company contributed significantly to bottomline growth during the quarter," the company said. Commenting on the overall market situation, MSI Chairman RC Bhargava said: "The situation is not as bright as many had hoped for. Maruti has had a better growth at 17 % in the first half of the year but industry as a whole is not doing good. Without us, the industry growth will be in the negative territory."
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