Maruti Suzuki Q4 results preview: Profit may surge 50%, margin expansion likely

Maruti Suzuki is all set to announce its March quarter results on Tuesday. The board of India's largest car maker will also consider paying final dividend for FY23 today. Analysts noted that decline in key raw material cost, price hikes and operating leverage would aid margin expansion for auto manufacturers including Maruti Suzuki this earnings season.

Chip supply has improved but still normalcy has not reached given OEMs are still facing production constraints in some variants. The demand trend is still reflected in robust order backlogs and waiting periods for high-end variants; however, entry-level products are facing demand challenges in certain pockets, Sharekhan said in its quarterly preview.

This brokerage expects Maruti Suzuki to outperform Tata Motors' PV division in terms of operating performance.

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Emkay Global expects Maruti Suzuki to report a 46 per cent year-on-year (YoY) rise in standalone net profit at Rs 2,684.90 crore for the March quarter compared with Rs 1,838.90 crore in the year-ago quarter. It sees sales surging 22 per cent YoY to Rs 32,613 crore against Rs 26,740 crore in the year-ago quarter. Ebitda margin is seen expanding to 10.4 per cent from 9.8 per cent in December and 9.1 per cent in the year-ago quarter.

"Revenue may grow YoY due to higher volumes (up 5 per cent) and realisation (up 16 per cent). Ebitda margin to expand YoY owing to benign scale and price hike," it said.

Kotak expects profit at Rs 2,830.50 crore, up 53.90 per cent YoY. Sales are expected to rise 21.1 per cent to Rs 32,377 crore. Motilal Oswal Securities sees profit for the largest car maker growing 54.2 per cent YoY to Rs 2,836.50 crore.

Prabhudas Lilladher said it sees the trend of premiumisation continuing in PV segment, albeit at slower rate, adding that aggressive aggressively participation may help it grow faster than the industry and derive benefits of operating leverage and superior mix

""Easing of supply chain constraints, combined with traction for new model launches and healthy demand during festivals, aided volume growth," said Motilal Oswal Securities. This brokerage said lower raw material cost and operating leverage may help Ebitda margin expand 110 bps QoQ to 10.9 per cent.

Maruti Suzuki shares have been flat year-to-date against a 2.26 per cent rise in the BSE Auto index during the same period. The stock is up 7.35 per cent in the last one year against BSE Auto's 17 per cent rise.

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