Maruti Suzuki Q1 net profit seen up 46% to Rs 620 crore

Moneycontrol Bureau

Maruti Suzuki reports its first quarter earnings later on Thursday, amid what has been a continued slowdown in the passenger car market in India. While petrol car sales have been sluggish for more than one year now, diesel car sales too have showed some signs of slowdown in the last couple of months, which will weigh on the country's largest passenger car maker's sales. However, its net profit will get a boost from a depreciating Japanese Yen (company pays for imported parts and royalty in Yen), and synergies from the merger of Suzuki Powertrain India Ltd. Maruti Suzuki had announced the merger of SPIL, an high EBITDA business, last June. Analysts on average expect Maruti Suzuki's first quarter net profit to rise 46 percent year-on-year to Rs 620 crore, while revenue is seen down 8 percent from a year ago to Rs 9,900 crore, according to a CNBC-TV18 poll. Maruti Suzuki sales in the April-June quarter were down 10 percent year-on-year. Domestic sales were down 7 percent and exports tumbled 35 percent. Its EBITDA is expected to rise 43 percent to Rs 1,127 crore in Q1, while operating margins are seen expanding to 11 percent from 7.2 percent. On a quarter-on-quarter basis, however, Maruti Suzuki's EBITDA is likely to decline since the share of diesel cars in April-June was lower and the company is also offering higher discounts on its passenger cars to boost sales. Average discounts offered by Maruti Suzuki increased to around Rs 14,000 per car in Q1 from around Rs 10,500 in Q4. Also Read: Hero Moto surges on operating margin, mkt share gains KEY THINGS TO WATCH - Retail sales growth and outlook for the rest of the year
- Road ahead in the export market, where sales slumped in Q1
- Update on diesel passenger car demand in the domestic market
- Production update. Maruti had cut 1 shift at Manesar following the slowdown in diesel vehicle sales
- A light on discounts in the market and plans ahead
- Views and comments on the Rupee and Yen depreciation and hedging for FY14.
- New launches planned for the festive season STOCK WATCH At 11:30hrs, Maruti Suzuki shares were trading flat at Rs 1,416.15 on NSE. The stock is up 10.5 percent since March-end, outperforming the wider Nifty index, which has gained 5.4 percent.