Maruti Suzuki Q3FY19E Result Expectation

Street will watch out for management commentary on volume growth, extent of discounting, channel inventory and demand. New launches will be keenly tracked.

Jan 25, 2019 05:01 IST India Infoline News Service

Maruti Suzuki India Limited (MSIL) Consensus Expectations for Q3FY19E:
  • Revenue: Rs19,465cr (up 1% yoy, down 13% qoq); MSIL will report flat revenue yoy (down 13% qoq); the lowest in multiple quarters, due to weak volume in Q3FY19 (down 1% yoy, 12% qoq). The volume mix was favourable during the quarter; with lower proportion of Mini segment and higher proportion of compact segment, Ciaz and vans. However, realization growth will be restricted to 2% yoy (down 2% qoq) due to high year-end discounting.
  • EBITDA: Rs2,582cr (down 15% yoy, 25% qoq).
  • EBITDA margin: 13.3% (contraction of 249bps yoy, 203bps qoq); Weak volumes and higher commodity prices will reduce operating leverage, leading to 249bps yoy margin contraction (203bps qoq) in Q3FY19.
  • PAT: Rs1,907cr (up 6% yoy, down 15% qoq).

Q2FY19 performance highlights:
  • Revenue: Rs22,433cr (up 3% yoy, flat qoq). Revenue growth for the quarter (3% yoy, flat qoq) was led by volume decline of 1.5% yoy (1% qoq) and realization growth of 5% yoy (1% qoq). This was the first quarterly volume decline for MSIL in more than at least 18 quarters. After exhibiting double digit growth over past 4 years (FY15-18), volume growth has been coming off for MSIL due to several macro-economic factors. This is a sector-wide phenomenon and companies are reacting to it by offering aggressive discounts during the ongoing festive season.
  • EBITDA: Rs3,431cr (down 7% yoy, up 2% qoq).
  • EBITDA margin: 15.3% (contraction of 160bps yoy, expansion of 37bps qoq). EBITDA performance was affected by lower operating leverage, weak volumes, high discounting and adverse commodity movements.
  • PAT: Rs2,240cr (down 10% yoy, up 13% qoq).
Comments:
  • Street will watch out for management commentary on volume growth, extent of discounting, channel inventory and demand. New launches will be keenly tracked.

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