Maruti Q4 preview: Experts eye 35-40% YoY rise in PAT despite chip shortage

Analysts anticipate revenue growth of 10-11 per cent YoY driven by price hikes taken over the last few quarters, including two rounds of price hikes taken this year to offset input cost rise.

Maruti Suzuki India Q4 preview: India's largest carmaker Maruti Suzuki India is likely to report bumper March quarter 2022 (Q4FY22) results on Friday, April 29. Analysts anticipate revenue growth of 10-11 per cent year-on-year (YoY) driven by price hikes taken over the last few quarters, including two rounds of price hikes taken this year to offset input cost rise.

They expect volumes to grow by nearly 14 per cent quarter-on-quarter (QoQ) in Q4FY22 as semiconductor shortage situation improved on a sequential basis. However, volumes are expected to decline by 0.7 per cent on a YoY basis owing to supply chain headwinds. Maruti's total sales had climbed by 2 per cent YoY in March 2022 to 1,70,395 units. The company had also reported record-breaking exports of 2,38,276 units in FY22.

That apart, EBITDA margin is expected to improve by around 150 basis points QoQ to 8.2 per cent, driven by price hike implemented in January 2022, lower discounts due to higher retail sales, and cost cutting initiatives.

On the other hand, analysts expect net profits to jump in the range of 35 per cent to 40 per cent YoY. Earlier, the carmaker had posted a 48 per cent YoY fall in net profit in Q3FY22 due to global chip shortage and lower production.

At the bourses, Maruti Suzuki has gained over 4 per cent this year, as against 0.86 per cent rise in the S&P BSE Auto index. The stock has outperformed Tata Motors that bled by over 12 per cent, but has underperformed M&M which climbed over 11 per cent during the same period.

Factors to watch out

Investors will track management's commentary on margin trajectory for Q1FY23 due to sharp run-up in input costs. They will also map how the demand sentiments fare given the recent price hikes.

Here is what top brokerages expect from Maruti Suzuki India's Q4FY22 numbers:

Axis Securities: The brokerage firm expects volumes to decline by 1 per cent YoY to 4,88,830 units on the back of supply chain issues and semiconductor chip shortages. It expects revenue growth of 12 per cent YoY due to price hikes taken over the last few quarters.

That apart, it also expects EBITDA to improve by 10 per cent YoY to Rs 2,198 crore due to positive operating leverage and richer model mix. The company is expected to report a 31.4 per cent jump in profit-after-tax (PAT) YoY to Rs 1,532 crore.

IIFL Securities: Analysts peg improvement in volumes by 13.5 per cent QoQ to 495,235. They also expect price hike taken in January 2022 to aid margin by 152 bps QoQ at 8.3 per cent in Q4FY22. However, the brokerage firm sees EBITDA margin to decline by 1 bps YoY due to rising raw material prices. Meanwhile, 41.8 per cent jump in PAT is estimated on a YoY basis.

ICICI Direct: The brokerage firm models net sales to climb by 15.4 per cent QoQ to Rs 25,654 crore, driven by 13.5 per cent QoQ volume growth and 2 per cent QoQ average selling price to Rs 5.25 lakh per unit. Analysts expect operating leverage to aid EBITDA margin by 70 bps QoQ to 7.4 per cent. On the other hand, PAT is expected at Rs 1,362 crore, up 34.6 per cent QoQ.