Country's largest car manufacture Maruti Suzuki is expected to report another set of strong earnings for July-September quarter. According to analysts polled by CNBC-TV18, profit is likely to increase 43.7 percent year-on-year to Rs 1,240 crore, driven by revenue as well as operational performance. The company will announce its earnings on October 27.
Revenue is seen rising 13.6 percent to Rs 13,984 crore compared to Rs 12,303.8 crore due to healthy volume growth. Car sales in September quarter increased by 9.8 percent year-on-year and 4 percent quarter-on-quarter to 3.53 lakh units, driven by new launches SCross, Ciaz and Alto ATM.
Operating profit (earnings before interest, tax, depreciation and amortisation) during the quarter may jump 48.1 percent to Rs 2,253 crore and margin may expand 370 basis points to 16.1 percent compared to year-ago period.
Maruti has been surprising on upside for last few quarters, which has risen from 11.7 percent in Q1FY15 to 16.3 percent in Q1FY16 aided by enhanced product mix (i.e lower share of mini car segment). Margin may also get supported by falling raw material cost.
Analysts do not see currency impact as on sequential basis Yen against dollar was largely flat. However, higher advertising spends due to new launches like SCross could restrict margin upside.
Gross margin may remain at elevated levels due to lower raw material prices. In Q1, gross margin jumped to 32.6 percent from 28.3 percent on year-on-year basis.
They expect realisations to rise further during the quarter. In Q1FY16, realisation per vehicle rose 3 percent year-on-year to Rs 3.93 lakh per unit against 3.81 lakh per unit.
The stock rallied 32 percent in 2015 and hit a life-time high of Rs 4,762 on September 30.
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