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Maruti Suzuki Q1 preview: Expect strong double digit growth in net profit

According to a Reuters poll of 18 analysts, the Delhi-based car maker could report 46 percent growth in stand-alone net profit at Rs 2,272.7 crore.

July 25, 2018 / 18:44 IST
Maruti Suzuki Dzire | Rs 5.89 lakh | The Maruti Suzuki Dzire is the only sedan on this list to make it to the top-10 selling cars of September. With sales of 13,988 units, the Dzire stands far above the rest of the sedans.
     
     
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    Maruti Suzuki India, the country’s largest car maker, will likely post double digit rise in net profit for the quarter ended June on the back for a stellar rise in sales of premium priced cars.

    According to a Reuters poll of 18 analysts, the Delhi-based car maker could report 46 percent growth in stand-alone net profit to Rs 2,272.7 crore for the quarter under review. The automaker will announce its results on on July 26.

    The company saw total volumes grow by 24.3 percent to 490,479 units during the April-June quarter as against 394,571 units clocked during the same quarter last year.

    Domestic volumes grew by nearly 25 percent to 458,967 units as against 367,386 units while exports remained flat at 25,724 units as against 25,821 units. Sales of the only commercial vehicle Carry, a mini truck, grew by 366 percent to 4,873 units.

    Besides an extensive sales network push that increased volumes, the company benefited from the return of demand from rural areas which had seen some pressure last year. The company's revenue is expected to grow to 22,471.4 crore according to the poll, which is around 14 percent higher as compared to the corresponding quarter when the company's revenue grew to Rs 19,777 crore.

    "Revenue is expected to rise by 31 percent on the back of strong volume growth and higher realisations due to an improvement in the product mix. EBITDA margin is likely to grow by 130bps to 15.5%. Net profit at Rs 2340 crore is expected to rise by on higher other income and strong operating performance," an IDFC Securities report said.

    Most of Maruti Suzuki's new launches such as the Swift, Dzire, Baleno and  Vitara Brezza have been well received in the market. The Ignis is the only model that has not got the same response. Despite hiking capacity with the coming on stream of the new plant in Gujarat, demand continues to outstrip supply for some of the models.

    The company enjoys 53 percent share in the domestic market as per data shared by the Society of Indian Automobile Manufacturers (SIAM) by the end of the last quarter.

    A report from Sharekhan said, “Recent launches of MSIL continue to have strong demand with about 40% of the portfolio having waiting period of 5 to 14 weeks. As per our channel  checks, Vitara Brezza SUV has a waiting period of 14 weeks, while refreshed S-Cross has a waiting period of about 10 weeks. Similarly, Dzire has a waiting period of about six weeks, while Baleno and Swift have waiting periods of about five weeks”.

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    Swaraj Baggonkar
    Swaraj Baggonkar
    first published: Jul 25, 2018 06:01 pm

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