Maruti Suzuki hits new high ahead of Q2 results

Post Q1FY17 results, the stock outperformed the market by gaining 27% as compared to 0.18% decline in Sensex.

Maruti Suzuki India hit a new high of Rs 5,775, up 1% on BSE in intra-day trade on BSE, ahead of its July-September quarter (Q2FY17) earnings on Thursday, October 27, 2016.

In past three-months, post April-June quarter (Q1FY17) results, the stock outperformed the market by gaining 27% as compared to 0.18% decline in the S&P BSE Sensex. The S&P BSE Auto index was up 7% during the same period.

Edelweiss Securities expect revenue growth of 27% year-on-year (YoY) led by 18% YoY improvement in volumes. The brokerage house expects operating margins to see a marginal drop of 20 basis points (bps) on quarter on quarter (QoQ) to 14.6% due to adverse Yen impact on indirect imports.

“Volumes grew around 18% YoY (+20% QoQ) in Q2FY17 to around 418,470 units primarily led by incremental volumes of new launches (Brezza and Baleno) as well as growth in mid-size segment,” according to Motilal Oswal Securities.

“We expect net profit to grow 29% YoY (+24% QoQ) to Rs 1,840 crore. Margin to contract 110 bps YoY (+40 bps QoQ) to 15.2% on account of higher raw material costs due to adverse forex movement YoY,” the brokerage firm said in Q2 results preview.

HDFC Securities expect healthy topline growth of 30% YoY aided by 18% volume increase and 12% net ASP improvement owing to richer product mix. The EBITDA (earnings before interest, taxes, depreciation, and amortization) margins to improve by 40bps QoQ on account of better product mix and benefit of operating leverage.

At 11:06 am, the stock was trading at Rs 5,750, up 0.66% against 0.48% decline in the S&P BSE Sensex. A combined 128,899 shares changed hands on the counter on BSE and NSE so far.