Maruti Suzuki Q3 results preview: Analysts see up to 30% YoY growth in PAT

According to the monthly sales data, Maruti sold 4.95 lakh units in the December quarter of FY21, up 13.4 per cent from 4.37 lakh units sold in the year-ago quarter

Maruti Suzuki is expected to post a healthy set of numbers for the December quarter of FY21 (Q3FY21), which is scheduled to be released on Thursday. Analysts are building up to 30 per cent year-on-year (YoY) growth in the company's bottom-line while revenue is seen growing in early teens, on account of strong volume during the quarter. The company had posted revenue of Rs 20,706.8 crore and profit of Rs 1,564.8 crore in Q3FY20.

According to the monthly sales data, Maruti Suzuki sold 4.95 lakh units in the December quarter of FY21, up 13.4 per cent from 4.37 lakh units sold in the year-ago quarter. In Q3FY21, the company registered 4.57 lakh domestic sales, up 13 per cent YoY, and 28,528 in exports, up 20.6 per cent YoY.

During Q3FY21, Maruti Suzuki's stock rose 13 per cent during the October-December period (Q3FY21), but underperformed the benchmark Nifty50 index, which surged 24 per cent in the same period, ACE Equity data show.  Meanwhile, the Nifty Auto index grew 15.3 per cent in the same period.

Here's what leading brokerages expect.

HDFC Securities

The brokerage sees Maruti's revenues growing by 14 per cent YoY and 26 per cent QoQ to Rs 23,700 crore, owing to a similar growth in volumes while PAT may grow 15 per cent YoY to Rs 1,810 crore. Ebitda margin may rise 5 bps YoY at 10.2 per cent while the same could be down 12 bps sequentially. Demand trends – particularly that of entry level cars and status of model availability and waiting periods thereof -- will be the key monitorables, it said.

Motilal Oswal

Motilal Oswal expects Maruti's operating revenues to grow 13.9 per cent YoY at Rs 23,585 crore while net profit is seen at Rs 2,032 crore, up 30 per cent YoY. Ebitda may come in at Rs 2,659.2 crore, up 26.5 per cent YoY while Ebitda margin may grow to 11.3 per cent as compared to 10.2 per cent in Q3FY20 (mix weak due to higher demand in entry/mid-level cars). Operating leverage and lower discounts are set to dilute raw material cost increase and drive margin, the brokerage said.

"Maruti Suzuki witnessed stronger-than-expected demand resulting in minimal channel inventory. Meanwhile, there exists the risk of supply-side disruption due to global shortage of semi-conductors, the brokerage said. Product launches and competitors’ diesel portfolio performance are key monitorables," it said.

Kotak Institutional Equities

Analysts at the brokerage are building a 14 per cent YoY rise in Maruti's Q3 revenues at Rs 23,498 crore, led by 13.5 per cent YoY increase in volumes while profit after tax (PAT) is seen growing 27.4 per cent YoY to Rs 1,992.8 crore. Earnings before interest, tax, depreciation, and ammortisation (Ebitda) is estimated at Rs 2,664 crore, up 26.7 per cent from Rs 2,102 crore, reported in Q3FY20, led by positive operating leverage and offset by YoY decline in gross margin due to rise in input costs in the quarter under review. Ebitda margin may improve 110 basis points (bps) YoY due to operating leverage benefits.

BOB Capital Markets

Led by volume growth and a mere 2 per cent rise in average selling price (poor product mix despite BSVI transition), BOB Capital Markets expects 17 per cent YoY revenue growth to Rs 24,117 crore for Maruti in the quarter under review. Meanwhile, operating margins are forecast to contract 70 bps YoY and 80bps QoQ to 9.5 per cent given raw material cost pressure. Profit after tax (PAT) is seen improving to Rs 1,620.7 crore. Inventory levels, raw material price trend and new launch timelines remain the key things to watch out in the results, it said.

BP Wealth

BP Wealth believes Maruti Suzuki may clock revenue at Rs 23,310 crore, up 12.5 per cent YoY with an Ebitda of Rs 2,50.7 crore, up by 21.2 per cent YoY while net profit is set to increase 15.6 per cent YoY to Rs 1,835 crore. Ebitda margin for the quarter is expected to be at 10.9 per cent, led by operating efficiency, lower discounts and cost reduction.