Maruti Suzuki Q1 Earnings: Robust 142% Net Profit Surge on SUV Market Success


Maruti Suzuki India Limited, the renowned automobile manufacturer in India, is all set to release its first-quarter financial results, and analysts expect a robust performance driven by healthy volume growth, price increases, and an improved product mix.

Maruthi Suzuki

According to estimates from five brokerage firms, Maruti's net profit is projected to soar approximately 142% from the previous year, reaching Rs 2,400 crore, as opposed to Rs 1,012 crore. The company's revenue from operations for the quarter under review is expected to grow by 20% compared to last year's Rs 25,500 crore.

Although Maruti's revenue quarter-on-quarter is likely to remain steady due to a 3.3% decline in volumes, higher realizations are anticipated to offset the decline. EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to witness a substantial increase of around 70%, surging to Rs 3,276 crore from Rs 1,912 crore during the same period last year, as suggested by Moneycontrol's research.

Moreover, EBITDA margins are projected to witness a rise of approximately 10%, amounting to a 241 basis points increase from the corresponding quarter of the previous fiscal year. The brokerage firm BNP Paribas indicates that although there might be lower operating leverage, it would be compensated by lower commodity prices, effective cost control, and a superior sales mix.

In terms of sales volumes, there is an estimated 6% year-on-year growth, reaching around 5 lakh units, largely attributed to the introduction of new models and discounts on lower-end models. Realizations are also predicted to increase by 10.2% to approximately Rs 6.23 lakh per unit.

One of the key highlights investors and analysts are eagerly waiting for is the management's commentary on the company's new offerings in the sports utility vehicle (SUV) segment. Maruti Suzuki has recently launched several SUV models like Jimny, Fronx, and Invicto, demonstrating its keen interest in capturing a significant market share in the SUV segment.

Market analysts tracking the company are optimistic and believe that the introduction of these new SUV models would significantly boost Maruti's earnings in the upcoming quarters. Kumar Rakesh, the lead analyst at BNP Paribas, shared his positive sentiment, stating that Maruti's successful entry into the SUV space has been well-received, and he wouldn't be surprised if the company gains recognition as a prominent SUV player rather than just a leader in the compact car segment, which has been its historical forte.

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The information provided in this article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell securities. All investments involve risks, and individuals should exercise caution and conduct thorough research before making investment decisions.

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