Maruti Suzuki's Q1 PAT may slip up to 32% QoQ, say analysts

India’s largest automobile maker Maruti Suzuki India may be able to guard the dent on revenue, during the June quarter of FY22 (Q1FY22), owing to sequential rise in average selling prices (ASPs), price hike taken during the quarter, and better product mix, say analysts.

Moreover, the bottom line could be positive, relative to a net loss posted last year, as auto demand remained resilient during the second wave of Covid-19 compared with last year’s nationwide lockdown. The auto major is slated to report its Q1FY22 result on Wednesday, July 28.

Analysts, on an average, expect the automaker to report a standalone net profit anywhere between Rs 787 crore and Rs 987.7 crore. However, the outlier figures on the extreme ends peg the same at Rs 426 crore and Rs 1,097.4 crore.

Maruti Suzuki had posted a net loss of Rs 249.4 crore in the year-ago period and a profit of Rs 1,166.1 crore in Q4FY21.

On the revenue front, analysts estimate the income to rise in the range of 340 to 353 per cent year-on-year (YoY) and decline 22 to 25 per cent QoQ, up to Rs 18,619 crore.

“Volumes for the quarter declined 28.2 per cent QoQ to 3.53 lakh units but revenue decline is expected to be lower at 25 per cent QoQ to Rs 18,026 crore tracking 3.1 per cent sequential rise in ASPs to Rs 4.81 lakh/unit amid price hikes undertaken and slight product mix improvement,” said analysts at ICICI Securities. Revenue in the March quarter stood at Rs 24,024 crore and at Rs 4,106.5 crore in Q1FY21.

Ebitda margins to shrink

While lower discounts sequentially, price hike of about 1.5 per cent, and better mix should benefit realizations (up 6.5 per cent QoQ), foreign brokerage Nomura believes MSIL’s Ebitda margins may decline 180bp QoQ at 6.5 per cent on higher commodity, poor operating leverage and ramp-up of third unit in Gujarat plant.

A conservative estimate by Kotak Institutional Equities pegs the same at 4.9 per cent, down 344 bps (from 8.3 per cent in Q4FY21) but up 2,587 bps from -21 per cent, led by negative operating leverage.

Like PAT, consensus estimate for Ebitda stands at Rs 1,094 crore with extreme deviations at Rs 860.5 crore and Rs 1,209 crore.

Ebitda (earnings before interest, tax, depreciation, and amortization) loss stood at Rs 863.4 crore in the corresponding quarter of the previous fiscal. However, Ebitda gain was Rs 1,991 crore in Q4FY21.

During the quarter under study, the stock of Maruti Suzuki gained 9.5 per cent on the BSE as against a 7 per cent rally in the S&P BSE Sensex. The BSE Auto index, on the other hand, advanced 6.8 per cent during the same period, ACE Equity data shows.