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Maruti Suzuki Results Preview | Net profit to rise 34% on price hikes

Rise in net profit likely to be aided by growth in revenues and price hikes

Mumbai / April 29, 2022 / 07:57 AM IST
Maruti Suzuki (Representative image)

Maruti Suzuki (Representative image)

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Maruti Suzuki India is expected to report a 34 percent year-on-year rise in net profit to Rs 1,565.3 crore for the quarter ended March, according to an average of estimates from six brokerage houses polled by Moneycontrol.

The rise is likely to be aided by growth in revenues and price hikes. Maruti Suzuki will report earnings on April 29.

The passenger car maker’s revenue from operations is expected to rise 11.3 percent to Rs 26,737.3 crore largely due to a 13 percent jump in average selling price of products.

On the volume front, performance will be muted as brokerages expect a one percent decline due to semi-conductor shortages and demand environment. Lack of presence in the fast-growing sports utility vehicle (SUV) category will also limit growth in sales.

“It has strong market share in the fast growing CNG segment, but weakness in SUV leads to overall lower share,” Motilal Oswal Financial Services said in a note.

Operating performance is expected to be muted given the impact of higher commodity prices. While operating profit is expected to grow 16 percent to Rs 2,308.8 crore, margins are likely to shrink.

Higher aluminium and semi-conductor prices globally will continue to hurt margin performance with analysts expecting 50 basis point compression in earnings before interest and tax margin.

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Chiranjivi Chakraborty
first published: Apr 29, 2022 07:57 am