Moneycontrol
Last Updated : Jan 25, 2019 09:13 AM IST | Source: Moneycontrol.com

Maruti Suzuki to announce Q3 result today; here's what analysts are expecting

At operating level, Maruti is expected to disappoint as there could be contraction in margin. Analysts expect EBITDA to fall in the range of 4-16% YoY.

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The Swift secured an obvious third place, closing the top three spots for Maruti Suzuki.
The Swift secured an obvious third place, closing the top three spots for Maruti Suzuki.
 
 
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Maruti Suzuki India is likely to report mixed set of earnings for the quarter ended December 2018 as realisation may support revenue growth amid low volumes while lower operating performance may hit profitability.

The country's largest car maker will announce its third quarter earnings on January 25.

Overall, analysts have given mixed estimates for profit growth as some expect marginal increase in bottomline and others see a fall in profitability.

Motilal Oswal and Kotak Securities expect around 6 percent fall in profit while ICICI Securities and Edelweiss see 3 percent growth year-on-year for the quarter.

All analysts expect moderate growth in revenue amid lower sales volumes during the quarter-ended December 2018, driven by increase in average selling price (ASP) due to better product mix.

"Maruti volumes dipped 0.6 percent YoY (down around 12 percent QoQ) and with no significant price hike taken along with higher discounts given during the quarter, Maruti is expected to report 0.3 percent growth in revenues in Q3FY19 YoY," Prabhudas Lilladher.

According to Motilal Oswal, net realisation is expected to improve 1.7 percent YoY (down 0.8 percent QoQ) to Rs 4,54,840 per unit, resulting in net revenue increase by 1.1 percent YoY (down 12.3 percent QoQ). "Growth in realisation is likely to be driven largely by a favourable product mix.

Edelweiss Securities, other brokerage houses considered for this poll estimates, expect maximum revenue growth of 6 percent YoY on account of a flat volume growth but an increase in ASP due to an improvement in mix.

At operating level, Maruti is expected to disappoint as there could be contraction in margin. Analysts expect EBITDA (earnings before interest, tax, depreciation and amortisation) to fall in the range of 4-16 percent YoY.

"We expect margins to contract 270bp YoY (down 140 bp QoQ) mainly due to higher raw material costs. EBITDA is estimated to degrow by 15.6 percent YoY (down 20.7 percent QoQ)," Motilal Oswal said.

Kotak Securities also expects EBITDA to decline 14 percent YoY in Q3FY19 led by weak revenue growth, rise in commodity costs and increase in discounts.

Given the commodity price rise as well as unfavourable Yen movement, margins are expected to be lower 230bps YoY/180bps QoQ, Prabhudas Lilladher said.

Key issues to watch out for

> Update on demand scenario, channel inventory, discounting trends and new launches.

> Demand trend in urban and rural areas.
First Published on Jan 25, 2019 09:13 am
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