Q3FY24 Preview: Maruti Suzuki India: Revenue seen at ₹332,587 Million, PAT at ₹28,731 Million

29 Jan 2024 , 11:38 AM

Result date: January 31, 2024

Recommendation: Add

Target price: ₹11,120

Maruti Suzuki India (MSIL) witnessed 8% year-on-year growth in volumes owing to the shift in festivals this year. Sequentially, volumes were down 9% owing to factors of seasonality and destocking. Analysts at IIFL Capital Services expect the company’s average selling prices to decline by 1-2% sequentially due to higher discounts in the festive period. Thus, revenue could grow 14.5% over the year-ago quarter, but decline 10.3% sequentially.

Analysts at IIFL Capital Services expect MSIL’s EBITDA margin to deteriorate 180 basis points sequentially (discounts, negative operating leverage). Key sequential margin tailwinds are JPY depreciation (down 1% in the December quarter) and fall in precious metals. On the flip side, key sequential margin headwinds include negative operating leverage and sharp rise in discounts.

MSIL’s Profit After Tax or PAT could grow 22.2% over the year-ago quarter, while declining 22.7% on a sequential basis.

Important management insights to watch out for:

• Demand trends across segments, markets
• Outlook on pricing, margins

₹ Million	December 2023 estimates	YoY change	QoQ change
Volumes	501,207	7.6%	(9.2)%
Revenue	332,587	14.5%	(10.3)%
EBITDA	37,101	31.0%	(22.5)%
EBITDA margin	11.2%	140 bps	(175) bps
Profit After Tax	28,731	22.2%	(22.7)%

Source: IIFL Research