Maruti Suzuki Q1FY21 preview: Brokerages see net loss of up to Rs 750 crore

Maruti Suzuki is scheduled to announce its June quarter results of FY21 (Q1FY21) on Wednesday and analysts expect the company to report significant contraction in topline and profits due to the Covid-19-triggered lockdown. Brokerages are building in a net loss of up to Rs 750 crore for Maruti for the quarter under review led by a massive decline in volumes, as compared to a profit of Rs 1,435.5 crore reported in Q1FY20.

According to the company's monthly auto sales data, Maruti Suzuki sold 76,599 units during Q1FY21, down 81 per cent on year-on-year (YoY) basis as compared to 402,594 units sold in Q1FY20. The Q1FY21 numbers comprise the sale of 67,027 units and 9,572 units in the domestic market and export, respectively.

At the bourses, shares of Maruti Suzuki gained 11.8 per cent during the April-June period. In comparison, the S&P BSE Sensex gained 18.48 per cent in the same period.

Here's a quick look at what leading brokerages expect from Maruti Suzuki's June quarter numbers.

Motilal Oswal

Analysts at Motilal Oswal are building a loss of Rs 750.1 crore for Maruti in the quarter under review. They expect the company to post a revenue of Rs 3,608.7 crore, down 81.7 per cent YoY as compared to Rs 19,719.8 crore reported in Q1FY20 while Ebitda (Earnings before interest, tax, depreciation, and ammortisation) loss is seen at Rs 869.8 crore. "Maruti's mix remained weak due to demand revival driven by entry/mid-level cars. Meanwhile, a weaker Rupee and operating deleverage are likely to hurt the margins. Going forward, production ramp-up will be the key to meet demand, as such, updates on the same as well as product launches are key monitorables for the results," the brokerage said in a note.

ICICI Securities

The brokerage pegs Maruti Suzuki's Q1FY21 revenues at Rs 3,625.3 crore, down 81.6 per cent YoY owing to domestic passenger volumes (PV)  decline of 82 per cent YoY and a dip of 61.6 per cent YoY in exports. Further, it sees the loss at Rs 383.6 crore for the period under review.

"Realisations are likely to shrink 3.4 per cent YoY at Rs 473,000 due to mix (downtrading/ no diesel sales). Maruti may post an  (Ebitda) loss of Rs 311.6 crore while Ebitda margin might contract 1,898 basis points YoY as employee expenses remain high at 21.5% of sales." Besides, demand outlook and guidance for FY21, discounting trends, and update on new product launches will be the key monitorables, it said.

Prabhudas Lilladher

Maruti's 81 per cent YoY decline in volume during the quarter and around 3 per cent YoY decrease in realisation is expected to result in revenue decline of around 80 per cent QoQ to Rs 3,627.8 crore. The company is expected to post a loss of Rs 562.3 crore.

"We believe the decline in raw material prices will be offset by negative operating leverage hence margins are also likely to turn negative at 16.6 per cent as compared to 10.4 per cent in Q1FY20. On the operational front too, Maruti's Ebitda is seen at loss of Rs 603.3 crore" the brokerage said.

Nomura

Analysts at Nomura see a sharp 81 per cent YoY decline in volumes to impact revenues which are seen at Rs 3,910.1 crore for the quarter, a decline of 80 per cent on YoY basis. Gross margins may be impacted by inventory decrease, and an adverse product mix, which should be partly offset by lower commodity. Ebitda loss could be significant (loss of Rs 554.9 crore) on higher fixed costs. "Moreover, Maruti's average discounts seem to have declined by around 100 bps QoQ. However, the actual benefit could be lower as retails have been much lower compared to Q4 levels," it said in a result preview note.