Here's what to expect from Maruti Suzuki Q4 earnings

Moneycontrol Bureau

Maruti Suzuki India will kickstart auto sector earnings on Friday. Passenger car sales have been downhill for the past year now and so the street will keenly eye the company's performance in the fourth quarter and how it sees the road ahead.

Analysts expect the India's largest passenger car maker to report around 30-35 percent sequential rise (around 6-7 percent year-on-year) in quarterly net profit. Its revenue is expected to rise around 15 percent quarter-on-quarter (10 percent YoY), despite lower volumes compared to a year ago, helped by price hikes and improved mix (higher percentage of diesel vehicles).

Sales of passenger cars, especially petrol driven, have been sluggish over the last one year due to expensive loans and high interest rates. Maruti's compact car (Alto, WagonR, A-Star) sales too have taken a hit, although its DZire compact sedan and Ertiga multi-utility vehicle are in huge demand.

Emkay Global Financial Services expects a 5 percent year-on-year dip and 14 percent sequential pickup in volumes. EBITDA margins are expected to increase 80 bps QoQ (140 bps YoY) led by favorable Yen, better mix and operating leverage, the brokerage said.

Motilal Oswal is expecting 140 bps sequential (210 bps YoY) expansion in margins.

KEY THINGS TO WATCH

-- Current retail demand scenario for petrol as well as diesel vehicles, offers and discounts etc
-- Sales guidance for FY14. It has earlier guided for 5-7 percent industry growth this year
-- Forex hedges
-- Update on new launches if any in FY14
-- Capex plans for the year

STOCK WATCH

Maruti Suzuki shares closed at Rs 1,590.95 on NSE, up 3.6 percent on NSE. The stock has gained near 7 percent since Dec-end, outperforming the wider Nifty, which has been flattish over the same period.