Maruti Suzuki Q4 preview: Price hikes to lift revenue, margin, say analysts

Maruti Suzuki Q4 preview: Higher volume growth, coupled with increase in average selling price (ASP) due to price hikes, are likely to help the auto major clock up to 12 per cent revenue growth quarter-on-quarter (QoQ) to Rs 32,593 crore in the January-March quarter of FY23 (Q4FY23). The company will declare results on Wednesday, April 26.
 

According to brokerages, Ebitda (earnings before interest, tax, depreciation, and amortisation), is expected to outpace top-line growth, rising up to 22.4 per cent QoQ to Rs 3,466 crore in Q4FY23, led by rich product mix, and flat input cost prices.
 

On the margin front, analysts foresee up to 88 basis points (bps) QoQ expansion to 10.6 per cent in Q4FY23, amid price hikes, and operating leverage. PAT, therefore, they said, is largely to follow the Ebitda growth trajectory.
 

Ahead of Q4FY23 results, shares of Maruti Suzuki were flat at Rs 8,435 per share in Tuesday's intra-day trade, as against 0.08 per cent gain in the S&P BSE Sensex.
 

Here's what top brokerage houses peg for Maruti Suzuki's Q4FY23 numbers:
 

Prabhudas Lilladher

The brokerage firm forecasts the auto major to clock up to 12 per cent QoQ revenue growth to Rs 32,593 crore, aided by higher volume growth, increase in ASP due to price hikes, and favourable mix. Overall, they see volume growth of 10 per cent QoQ. That apart, margins are likely to improve to 10.6 per cent in Q4FY23, up 88 bps QoQ and 156 bps YoY.
 

Axis Securities

Analysts expect the company's Ebitda to outpace topline growth YoY and QoQ, led by richer product mix (higher share of SUV) and assumption of flat raw material costs QoQ. The rich product mix, price hike, and operating leverage, they said, will help expand Ebitda margins ~130/65 bps YoY/QoQ in Q4FY23. PAT, on the other hand, is likely to follow the Ebitda growth.
 

Motilal Oswal

Easing of supply constraints, combined with traction for new model launches, and healthy demand during festivals, will aid volume growth in Q4FY23, said analysts at Motilal Oswal. Therefore, volumes will rise to 5.14 lakh units in Q4FY23, up 10.5 per cent QoQ and 5.3 per cent YoY. That said, they caution against initial signs of demand moderation, and increase in supply challenges as near-term headwinds.
 

Sharekhan

With 10.5 per cent QoQ increase in volumes, and operating leverage benefit, the auto major is expected to register 11.6 per cent QoQ increase in topline. Bottom-line, on the other hand, is likely to see 16.6 per cent rise in QoQ, with 88 bps QoQ expansion in Ebitda margin.