Speeding Ahead

With an over 50 per cent rise in share price, Maruti Suzuki enters the Top 10. The auto major is set to be in the big league over the long run.

- Sumant Banerji

The onset of winter in 2016 was a challenging time for companies in India. On November 8, the government had demonetised ₹500 and 1,000 currency notes, sucking out 86 per cent liquidity. For a company like Maruti Suzuki India, this was a potential catastrophe, as cash has a big role in car purchases. Worse, smaller towns and villages, hit more than the bigger cities, accounted for nearly 33 per cent of its sales, more than for any other car maker. The company rose to the challenge. Over the next few weeks, card swiping machines were installed at all 2,500 outlets and dealers encouraged to convince banks to offer 100 per cent on-road financing. Maruti registered its highest monthly retail sales of 1.83 lakh units in December. The rivals stuttered.

This is just one example of how Maruti has upstaged competition in every facet of the business in the last two years. In the first half of 2017/18, its domestic market share stood at 50.4 per cent, the best since 2001/02. The last three launches, Dzire, Brezza and Baleno, have been blockbuster successes. It makes six of the top 10 best-selling cars in the country. With every passing quarter, it has been extending its lead over others.

In 2016/17, revenues grew 18.54 per cent to ₹66,909 crore and net profit 36.5 per cent to ₹7,337 crore. Revenues have risen 20 per cent to ₹38,570 crore in the first half of this fiscal (with profit Tat ₹4,040.7 crore).

It has broken into the top 10 in the BT500 list for the first time. The over 50 per cent increase in its share price in the Oct 2016-Sept 2017 period took it from rank 15 in last year’s BT500 to the rank 10 this year.

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