Robust volumes, operating profit margins to drive gains for Maruti Suzuki

Brokerages expect a recovery in H2, aided by easing commodity/supply concerns

The growth outlook for India’s largest passenger carmaker — Maruti Suzuki India (MSIL) — is turning the corner. While robust volumes and price hikes will drive revenue growth, moderating commodity prices and improving leverage are expected to rub off on its operating profit margins. 

Brokerages have tweaked their volume growth and earnings estimates upwards after the January-March quarter results (2021-22, or FY22) to incorporate favourable trends for the market leader.

In addition to the outlook, valuations are below the long-term average, the 14 per cent increase in its stock prices since the lows in March notwithstanding. 

While supply disruption has led to loss