At Rs 3,716.5 crore, Maruti Suzuki India Ltd (MSIL) on October 27 reported an 80.3 percent year-on-year (YoY) jump in its standalone net profit for the quarter ended September 30, on the back of higher net sales, softening of commodity prices, cost reduction, and higher non-operating income. India’s largest carmaker’s profit after tax (PAT) for the same period last year stood at Rs 2,061.5 crore.
The New Delhi-headquartered firm’s revenue from operations increased 23.8 percent over the year-ago period to Rs 37,062 crore. During the same quarter last year, MSIL's revenue stood at Rs 29,930.8 crore.
The financial results exceeded analysts’ expectations as the average estimates of five brokerage firms had predicted that MSIL was poised to post a net profit of Rs 2,921 crore in the second quarter.
The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA), or operating profit, went up 72.8 percent to Rs 4,784 crore in Q2, compared to Rs 2,769 crore in the corresponding period last fiscal. Its EBITDA margin also expanded by 360 basis points (bps) to 12.9 percent, from 9.3 percent in the corresponding period last year.
During the quarter, the company shipped 5,52,055 units, of which 4,82,731 units were sold in the domestic market, and the remaining 69,324 cars were exported. Total sales were up by 6.7 per cent from 5,17,395 units sold in Q2 FY2022-23 (4,54,200 units in the domestic market, and 63,195 in overseas markets).
Auto analysts reckon that the significant volume jump was largely due to new SUV rollouts as well as discounts for low-end car models during the second quarter.
The car maker also said that it had recorded its highest-ever quarterly sales volume, net sales, and net profit in this quarter.
Commenting on the financial results, Himanshu Singh, research analyst, Prabhudas Lilladher, said that improvement in margins and operations should help the stock’s performance. However, margin improvement had an element of inventorisation as well, which should get reversed in coming quarters, he added.
"MSIL has successfully transitioned from primarily being in the small cars space to becoming a leader in the SUV segment as well, and we see this trend continuing. MSIL has not disclosed its pending order book and discounting, which we will seek to get during the results call today. The stock currently trades at ~23.8X its FY24-25 PE, and we have a buy rating on the stock," said Singh.
Maruti Suzuki shares were trading at Rs 10,545 at 3:18 pm on the NSE on October 27, up 1.16 percent from the previous close.
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