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Taking steps to reduce costs, enhance margins: Maruti


NEW DELHI: The nation's largest carmaker Maruti Suzuki India (MSI) plans to take a lot of steps together with enhanced localisation, increase in productiveness and reducing overall prices with the intention to make stronger margins in the present fiscal, a senior company legitimate has mentioned.

The auto primary reported EBITDA margin of 14 according to cent for 2018-19, down 1.nine according to cent from 15.nine according to cent in 2017-18.


"We are working very hard on cost cutting, there is lot of effort on cost side...as a company we are all committed to work towards it and ensure that it (margins) improve from here," MSI CFO Ajay Seth mentioned.

The company will elevate on with its interior efforts with out being worried about the exterior factors like foreign currency echange charges, he added.

"External factors will be there but whatever is in our control we will try and work harder in terms of cost reduction and enhancing productivity," Seth noted.

He mentioned expanding localisation is a very powerful part of the initiative.

"Localisation is a big drive now. Wherever we have been hit on account of foreign exchange, we are now looking at large targets for localisation," he mentioned.

Overheads are beneath severe scrutiny and the corporate is taking a look at distributors on the subject of extra productiveness features, Seth added.

"So a variety of things are being done. For us it is very crucial that we improve from here," he mentioned. EBITDA margin is an review of a company's running profitability as a share of its total earnings.

It is the same as earnings ahead of interest, tax, depreciation and amortization (EBITDA) divided by total earnings.

MSI reported a 4.6 according to cent decline in net benefit to Rs 1,795.6 crore for the fourth quarter of the 2018-19. For the entire 2018-19, MSI posted a net benefit of Rs 7,500.6 crore, down 2.nine according to cent from the former financial year.

The carmaker has additionally determined to section out all diesel cars from its portfolio with effect from April 1, 2020.

When asked if the corporate is looking for write offs having already installed large investments in diesel engine plants over the years, Seth mentioned, the auditors have done an in depth study and concluded that there would not be any important have an effect on.

"Around 99 per cent of it (diesel capacity) is getting converted (into petrol, CNG etc).. there is no impairment as such, even if there is a impairment it is going to be a negligible amount," he added.

"If you cannot convert your facilities into anything else then you have to impair it," he further mentioned.


The company would be able to convert its existing plants as according to the corporate's long term goals, he added.


MSI plans to shift its whole portfolio to petrol, CNG powertrains.


The auto primary recently gets 23 according to cent of its total gross sales in the domestic marketplace from diesel cars. It bought a complete of 4.63 lakh diesel devices closing fiscal.


Some of the corporate's models like Vitara Brezza and S-Cross recently include a diesel engine possibility best. Others like Swift, Baleno, Dzire, Ciaz and Ertiga even have petrol variations along with the diesel trims.


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