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Maruti Suzuki to report Q1 earnings today; here's what analysts are expecting

Brokerages expect around 80 percent fall in revenue from operations, while realisation per vehicle may see a 3-5 percent decline YoY. The similar trend is also seen on sequential basis.

July 29, 2020 / 07:32 AM IST
Maruti Suzuki Dzire | 17,675 | The Maruti Suzuki Dzire takes the top spot in sedans with a sales of 17,675 units and while this is a growth of 26 percent from September, the numbers have decline by 10 percent from October last year.

Maruti Suzuki Dzire | 17,675 | The Maruti Suzuki Dzire takes the top spot in sedans with a sales of 17,675 units and while this is a growth of 26 percent from September, the numbers have decline by 10 percent from October last year.

 
 
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The country's largest car maker Maruti Suzuki India is expected to report a big loss at net as well as operating level due to sharp decline in volumes amid COVID-19-led lockdown in the quarter ended June 2020.

Numbers will be announced on July 29.

The company sold 76,600 vehicles during the June quarter registering an 81 percent decline compared to 4,02,600 vehicles sold in the corresponding period last fiscal. In Q1FY21, both domestic and export volumes declined by 82 percent and 66 percent YoY, respectively.

As a result, brokerages expect around 80 percent fall in revenue from operations, while realisation per vehicle may see a 3-5 percent decline YoY. The similar trend is also seen on sequential basis.

"We expect revenues to decline by 79 percent YoY in Q1FY21 led by (1) 81 percent YoY decline in volumes and (2) 5 percent YoY decline in average selling prices (ASPs) due to a weaker product mix," said Kotak Institutional Equities which sees net loss at Rs 384.7 crore for the quarter ended June 2020.

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Sharekhan expects net loss at Rs 360 crore and revenues to decline by 81 percent YoY in Q1FY21 while realisation per vehicle is expected to decline marginally 3 percent YoY driven by adverse mix.

At operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) loss for the quarter could be more than Rs 400 crore on negative operating leverage and lower volumes.

"We expect the company to report EBITDA loss of Rs 411.7 crore due to negative operating leverage in Q1FY21 and 2,047 bps contraction in margin," Kotak said.

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According to Narnolia, EBITDA margin is expected to decline by 1,950 bps QoQ on account of sharp decline in volumes leading to negative operating leverage and EBITDA loss may be at Rs 437 crore for the quarter.

Management strategy to gain market share in utility vehicle segment (increasing competition), production ramp-up, management commentary on margins and product launches would be key things to watch out for.

The stock price corrected around 15 percent year-to-date but gained 36 percent during June quarter 2020.
Moneycontrol News
first published: Jul 29, 2020 07:32 am

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