Maruti Suzuki India, the largest passenger vehicle manufacturer in India, is expected to report a sharp decline in profit from a year ago when declaring the third quarter results on January 25. However, income can multiply from the previous quarter.
Experts say the Indian car industry is still facing the supply side challenges and higher input costs, which will negate the impact of price increases and can have an impact on the performance of this sector in the three months ending December. Maruti is no exception and is likely to have another quarter that is calm, they said.
Maruti can report a 50-70 percent decline in consolidated net income to Rs 1,000 Crore in the third quarter of FY22. In sequence, profits can multiply from the previous quarter.
Brokers estimated consolidated income decreased by 3-4 percent in the year and remained in the range of RS 22,300 Crore to Rs 23,500 Crore. Sequentially, income can grow 9-14 percent.
The company reported Rs 1,941 Crore’s net profit on RS 23,458 Crore’s consolidated income during the period in accordance last year. Net income during the previous quarter was Rs 475.3 Crore and income was Rs 20,539 Crore.
Axis Securities expects Maruti to report a 13 percent decline in sales volume to 430,668 units from last year. From the previous quarter, this would increase by 13 percent.
“The lack of semiconductors continued to have an impact on volume in the third quarter, driving 13 percent of YoY’s decline. The export mixture was higher at 15 percent in this quarter vs 6 percent in the same quarter a year ago, but slightly below 16 percent was recorded in the previous quarter,” The Securities axis said in a report.
Sales price
It is hoped that consolidated revenue for makers of several best-selling models has decreased by 3 percent from last year to Rs 22,740 Crore. Sequentially, it expects revenue to increase by 11 percent.
“We expect 2.4 percent of Qoq to decline in ASP (average selling price) but the 11.6 percent yoy increase was largely due to one-time benefit from the revenue of higher spare parts in the previous quarter,” added the axis.
In the case of the main variables based on QOQ, the price increase of around 2 percent will be partly offset by a weaker mixture – a lower part of the model such as Baleno, Brezza and Ertiga. Discounts offered lower by 4,000 per vehicle from the previous quarter.
“Commodity costs remain increased in this quarter, and despite consistent price increases, there will still be some recovery for most players in the car sector,” said Research Institutional Centrum.
In sequence, input prices rose further in the quarter, with steel up 6 percent, aluminum higher by 14 percent, rubber rose 2 percent and crude oil rose 9 percent.
The axis estimates EBITDA (profit before interest, tax, depreciation and amortization) of 1,520 crore, which is a 32 percent decline in the year and 77 percent increase in the quarter.
“The EBITDA margin is regulated to increase assisted in sequence with the benefits of price increases and some normalization of commodity costs combined with the benefits of operating leverage,” said Axis.
An EBITDA margin of 6.7 percent will be an increase of 250 basis points from 4.2 percent margins reported in the previous quarter. On an annual basis, margins can decrease by 280 bps.
Axis expects Maruti to post a net profit ~ RS 1,000 Crore for the quarter, a decline of 49 percent in the year and a double increase from the previous quarter.
Institutional Equity Box estimates that Flat YoY fixed income after a 15 percent yoy increase in ASP due to price increases during the last few quarters and a more richer product mixture, and a 13 percent yoy decline in the volume due to the problem of lack of chips.
Ebitda Margin.
It is hoped that the car company is expected to report RS 23,466 Crore’s revenue for this quarter, which is an ~ 14 percent increase in the quarter but based on yoy, income tends to remain flat.
EBITDA was seen decreased by ~ 40 percent in the 1,341 crore rs for the quarter, sequential growth of ~ 57 percent.
“We estimate the EBITDA margin increased by 150 BPS QoQ led by (1) the benefits of operating leverage, (2) 20 increased BPS in gross margins mainly due to lower discounts (as% ASP) due to higher retail sales, and (3 ) Cost cutting initiative, “said the box.
The EBITDA margin for this quarter is likely to come at 5.7 percent, generating a profit of 1,021 crore at the quarter. This was an increase of 114.7 percent in the quarter but a decline in YoY 47 percent.
Oswal Motilal estimates that ASP has increased by 9.8 percent in the year, although a 13 percent decline in volume tends to result in a yoy decline of 4.6 percent in consolidated income at Rs 22,373 Crore. Sequentially, income is seen to increase by ~ 9 percent.
It expects a higher contraction in the EBITDA margin, which is likely to be around 4.4 percent in the quarter. This will drive net profit of up to 68 percent in the year to RS 618 Crore.
Maruti Suzuki shares fell 1.7 percent to Rs 8,052.30 near the National Stock Exchange on January 24. The stock was little changed for the past year and resulted in a 10 percent return in the past month.