India's largest car manufacturer Maruti Suzuki India will report its March quarter numbers on April 27. The company is expected to show healthy earnings growth given strong volumes in Q4 FY21.
Brokerages expect the company to report more than 40 percent year-on-year (YoY) growth in profit and revenue could jump over 30 percent compared to the corresponding period. The operating profit margin may see more than 100 bps expansion.
"We expect revenues to rise by 30 percent YoY in Q4 FY21 led by 28 percent YoY increase in volumes in Q4 FY21," said Kotak Institutional Equities which sees a 43 percent YoY growth in profit. Maruti sold 4,92,235 units in the March quarter.
KR Choksey expects revenue to see a sharp recovery of 34 percent YoY and 4 percent quarter-on-quarter (QoQ) on the back of strong volume growth, while average selling prices is expected to rise by about 3-5 percent YoY due to rise in product prices, better product mix and lower discounts offered during the quarter.
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At the operating level, "we estimate EBITDA (earnings before interest, tax, depreciation and amortisation) to increase by 46 percent YoY led by positive operating leverage offset by YoY decline in gross margin due to rise in input costs in Q4 FY21. We estimate gross margin to decline by 320 bps YoY," said Kotak which sees a 105 bps YoY rise in EBITDA margin for the quarter.
KR Choksey, which expects a 111 bps expansion in margin, said the key things to watch out for would be demand dynamics for passenger vehicle (both domestic and exports); product plans for electric vehicle segment and new model launches; inventory channel status; cost-cutting initiatives; and market response to BS-VI compliant vehicles.
