Maruti Suzuki Q1 Preview: Profit may jump up to 37% YoY, revenue around 9%

Maruti Suzuki Q1 2024 results: Investors will eye margin trajectory amid commodity pressures, elevated discounting.

Maruti Suzuki Q1 Preview: Automobile giant Maruti Suzuki is set to release its financial results for the June quarter of the fiscal year 2025 (Q1FY25) on Wednesday, July 31, 2023.

Analysts anticipate that the automaker will report a profit growth of up to 37 per cent and up to 8.5 per cent increase in revenue. However, analysts also project a potential decline in margins quarter-on-quarter due to commodity pressures and elevated discounting.

That apart, Maruti Suzuki India, on Monday, July 29, received a final assessment order imposing a tax demand of Rs 779.2 crore, including interest, along with a Show Cause Notice (SCN) for potential penalties. The company intends to appeal this decision before the Income Tax Appellate Tribunal and has stated that this order will not affect its financial, operational, or other activities.

On the bourses, Maruti Suzuki's shares settled 0.68 per cent higher at Rs 12,763.80. Over the past six months, the stock has surged approximately 27 per cent.

Now, let's take a look at what brokerages are predicting for Maruti Suzuki's Q1FY25 results:

Kotak Institutional Equities 

Analysts forecast a revenue increase to Rs 33,943.6 crore, with a profit of Rs 3,228 crore. They predict an Ebitda margin of 11.4 per cent, which represents a 90 basis points decline Q-o-Q. This decrease is attributed to negative operating leverage, commodity headwinds, and higher discounting in Q1FY25, despite a 5 per cent Y-o-Y increase in volumes and flat average selling price (ASP) growth.

Nuvama Institutional Equities 

Those at Nuvama expect the company to achieve a profit of Rs 3,071.4 crore and revenue of Rs 34,206.2 crore. They project an Ebitda of Rs 3,624.8 crore, maintaining an Ebitda margin of 12 per cent. The growth in revenue, analysts believe, is expected to be supported by increased volume and higher realisation, with the Ebitda margin likely to expand due to improved net pricing. The demand outlook will be a crucial factor to watch.

HDFC Securities 

The brokerage foresees a sequential decline in margins due to pressures from commodity headwinds and increased discounting strategies. Thus, it anticipates an earnings before interest, tax, depreciation and amortisation (Ebitda) margin of 12 per cent; profit of Rs 3,351.4 crore; and revenue at Rs 34,964.6 crore. 

Deven Choksey 

Deven Choksey analysts note that volumes grew by 4.8 per cent Y-o-Y, driven by strong performance in utility vehicles and exports, although there was a 10.6 per cent sequential contraction. 

However, realisation is projected to rise by 2.6 per cent Y-o-Y. Ebitda margins are expected to benefit from lower raw material costs and an improved product mix, expanding by 320 basis points Y-o-Y but contracting 114 basis points Q-o-Q. 

Net profit is anticipated to grow 36.2 per cent Y-o-Y, although it may decline 12.9 per cent Q-o-Q.

Thus, the brokerage estimates the company's revenue will be Rs 34,839.8 crore, with a profit of Rs 3,440.5 crore and Ebitda of Rs 4,329.4 crore, leading to an Ebitda margin of 12.4 per cent.