By- Sagar Shetty, Research Analyst, StoxBox
– Maruti Suzuki registered tepid revenue of Rs. 3,55,891 million during the quarter (up 0.2% YoY / up 5.1% QoQ), unable to meet the market estimates of Rs. 3,72,290 million. The marginal growth was led by a healthy recovery in the overseas market and better realization.
– During the quarter, EBITDA margin contracted by 105 bps YoY / 88 bps QoQ to 12.4%. The contraction was likely fueled by higher promotion expenses and adverse commodity prices.
– EBITDA stood at Rs. 44,166 million (down 7.7% YoY / down 1.9% QoQ), failing to meet the street estimates of Rs. 47,121 million.
– For Q2FY25, PAT stood at Rs. 30,692 million (down 17.4% YoY / down 15.9% QoQ). The margin for the same stood at 8.6% (down 183 bps YoY / down 215 bps QoQ). A one-time impact on PAT was also seen during the quarter on account of a provision for deferred tax liability.
– The quarter’s volumes stood at 5,41,550 units (down 1.9% YoY / up 3.8% QoQ). The sequential growth was likely due to a weaker base. Entry-level models witnessed extended degrowth during the quarter, while UVs and LCVs registered growth. The overall domestic volumes declined by 3.9% on YoY basis as the PV market continues to remain under pressure. The export volumes registered a 12.1% growth during the quarter indicating a healthy revival in exports.
– The date of amalgamation of Suzuki Motor Gujarat Pvt Ltd (SMG) with Maruti Suzuki India Ltd is April 01 2025.
View:
MSIL reported poor financial performance during the quarter, failing to meet the street estimates on all counts. A tepid quarterly performance was highly expected as the overall PV industry continues to struggle with its high inventory. Despite the headwinds, the company registered revenue growth, led by higher UV sales, which improved realization. The margins were affected during the quarter due to higher discount offerings but a partial offset impact was observed on account of favourable forex realization and cost reduction efforts. During the quarter, a positive export demand was highlighted, reinforcing a healthy recovery in the export market. The domestic market, however, continued to face inventory and seasonal wrath during the quarter, leading to degrowth on a YoY basis. As we advance, we believe that the company can effectively leverage its UV portfolio and strong market presence to capitalize on the changing consumer preferences. Additionally, with its existing product mix, the company can effectively cater to consumer’s varying fuel preferences as well. Management commentary on its dispatch plans, capex update and pipeline would be key factors to consider going ahead.