Maruti Q1 revenue likely to be flat QoQ; high RM costs may contract margins

Auto major Maruti Suzuki India is likely to clock up to 21.1 per cent year-on-year (YoY) revenue growth to Rs 32,081 crore in the April-June quarter of fiscal year 2023-24 (Q1YF24), pegged analysts. However, flattish sequential revenue growth is on cards amidst volume decline. 
 

The company is scheduled to announce the June quarter results on Monday, July 31.
 

Brokerages estimate earnings before interest, tax, depreciation, and amortisation (Ebitda) to grow up to 76.2 per cent YoY to Rs 3,368 crore in Q1FY24, while it may decline up to 7.4 per cent from a quarter-on-quarter (QoQ) perspective. 

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Ebitda margin, analysts said, is likely to expand up to 328 basis points (bps) to 10.5 per cent in Q1FY24, whereas a contraction of 56 bps QoQ is expected on account of lower sales volume and increase in input costs.
 

Adjusted profit-after-tax (PAT), meanwhile, may rise up to 152 per cent YoY to Rs 2,550 crore in Q1FY24. On the contrary, it is likely to fall up to 13.2 per cent QoQ from Rs 2,624 crore in Q4FY23.
 

On the bourses, shares of Maruti Suzuki surged 16 per cent so far this calendar year (CY23), as against a 9 per cent jump in the S&P BSE Sensex.
 

That said, here's what top brokerage houses estimate for Maruti Suzuki's Q1FY24 numbers:
 

Axis Securities

The brokerage firm predicts revenue to decline 2 per cent QoQ to Rs 31,342 crore due to lower overall unit sales, slightly lower export volume and higher discounts in lower category cars. Ebitda, too, is likely to see a fall of 7.4 per cent QoQ to Rs 3,102 crore, while margins are expected to contract 56 bps sequentially to 9.9 per cent on lower sales volume.
 

Moreover, analysts foresee earnings per share (EPS) to fall 13.2 per cent QoQ to Rs 75.4 per share in Q1FY24, as against Rs 87 per share in Q4FY23.

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Prabhudas Lilladher

Analysts expect Maruti's revenue to remain flattish on a sequential basis on 3.3 per cent volume decline, offset by 3.5 per cent QoQ higher realisation. Ebitda margin, too, may remain flat due to increase in input costs and lower operating leverage. Adjusted PAT, meanwhile, is likely to see a de-growth of 2.8 per cent QoQ to Rs 2,550 crore in Q1FY24, however, it may rise 152 per cent on a YoY basis.
 

Sharekhan

While the auto major's revenue is expected to rise 19.1 per cent YoY to Rs 31,567 crore, it is likely to decline 1.5 per cent on a QoQ basis, said analysts. Ebitda margins, on the other hand, may expand by 278 bps YoY to 10 per cent in the June quarter. However, up to 46 bps contraction is on cards on a sequential basis due to lack of operating leverage. The brokerage firm shared a 'buy' call on the counter, with Rs 10,965 as target price.