Maruti Suzuki surges 11% in 2 days post Q3 results; hits fresh 52-week high

Ebitda margins, which improved 250 bps QoQ at 6.7 per cent in Q3, was the real positive surprise with savings realised under all costs line items, analysts said

Shares of Maruti Suzuki India hit a fresh 52-week high of Rs 8,916.75, up 4 per cent on the BSE in Thursday's intra-day trade. The company's shares have surged 11 per cent in the past two trading days after it reported a healthy performance in October-December quarter (Q3FY22).

The stock of the cars & utility vehicles' company recovered 5.5 per cent from its intra-day low of Rs 8,457 today. At 02:46 pm, it was trading 3.4 per cent higher at Rs 8,893 as against 0.65 per cent decline in the S&P BSE Sensex at 57,483 points.

In Q3FY22, Maruti Suzuki's total operating income grew 13.2 per cent quarter-on-quarter (QoQ) at Rs 23,246 crore, primarily driven by 13.5 per cent QoQ growth in sales volume and 1.3 per cent QoQ rise in average selling price. Profit after tax (PAT) more-than-doubled or was up 113 per cent QoQ at Rs 1,011 crore. The company had posted profit of Rs 1,941 crore in the same period previous year (Q3FY21).

Despite cost reduction efforts, the net profit was down as compared to previous year due to lower sales volume, high commodity prices and lower non-operating income on account of mark-to-market impact.

Earnings before interest tax and depreciation and amortization (EBITDA) margins improved 250 bps QoQ at 6.7 per cent. Margin performance was the real positive surprise with savings realised under all costs line items, ICICI Securities said.

Maruti Suzuki said there was no lack of demand as the company had more than 240,000 pending customer orders at the end of the Quarter. Though still unpredictable, the electronics supply situation is improving gradually. The Company hopes to increase production in Q4, though it would not reach full capacity.

"MSIL is likely to initiate an aggressive model action plan in the next two years to fill up the white-spaces in its product range. The upcoming product launches are likely to include an above-4m SUV, below-4m SUV, large SUV and an off-roader. In addition, newgeneration models of Brezza, Baleno, Alto and S-Cross are expected. Suzuki/Toyota have technological capabilities for xEVs and are expected to commission a lithium ion assembly plant in Gujarat soon," analysts at Emkay Global Financial Services said in a result update.

The brokerage firm retained "Buy" rating on the stock with a revised target price of Rs 9,850 (Rs 8,750 earlier). Key downside risks are a delay in economic recovery, failure of new products, increase in competitive intensity and adverse movement in currency/commodity prices, it said.