Maruti Suzuki Q2 results preview: Profit to jump up to 70%; margin improvement likely

Maruti Suzuki India, the largest domestic carmaker, is likely to report up to 70 per cent surge in year-on-year (YoY) net profit for the September quarter on a 20 per cent-plus growth in revenue. Ebitda margin is seen expanding, both sequentially and YoY.

To recall, Maruti's domestic volumes were up 7 per cent YoY for the quarter and the response to the recent launches was strong. The focus on the SUV segment continued, which analysts said should aid its margins.

Phillip Capital sees Maruti Suzuki reporting a 70 per cent surge in profit at Rs 3,508.50 crore compared with Rs 2,061.50 crore in the same quarter last year. It sees sales rising 24 per cent YoY to Rs 37,070.20 crore compared with Rs 29,931 crore YoY, led by 17 per cent increase in realisation due to improved mix towards SUV and price hikes. Sales is seen growing 15 per cent sequentially amid volume growth of 11 per cent and higher realisations of 4 per cent.

Ebitda margin is seen improving nearly 240 basis points both on YoY and QoQ basis, on improved product mix, operating leverage and cooling commodity costs.

BOB Capital Markets said the expect the impact of Q1 price hikes will be fully reflected in the September quarter while easing commodity prices would further boost margins. This brokerage sees profit rising 24.6 per cent YoY to Rs 2,568.20 crore. It sees sales rising 20 per cent to Rs 35,887.40 crore. Ebitda margin is seen at 10 per cent. 

HDFC Institutional Equities sees Maruti's profit at Rs 3,029.40 crore on 21.6 per cent jump in profit at Rs 36,387.20 crore. It sees Ebitda margin at 11 per cent.

"For Maruti Suzuki, volumes are up 7 per cent YoY. However, its volume growth has been  arrested due to the 20 per cent YoY decline posted by the cars segment. This was offset by  strong 117 per cent YoY growth in UVs driven by its new launches. This has substantially  improved its UV mix to 33 per cent of total volumes from 25 per cent QoQ. As a result, we expect Maruti's margins to improve 130 bps QoQ to 11 per cent. Overall, we expect MSIL to post a  strong 47% YoY growth in earnings," the brokerage said.

 

 

 

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