Maruti Q4 preview: PAT clocked 32% YoY; Commodity Prices Through Dental Margin

Analysts say the auto sector is expected to post a healthy growth at aggregate sales levels during the January-March 2021 (Q4FY21) quarter, despite a slowing economy and rising rural demand despite gradual fluctuations in commodity prices. Operating margins, however, are likely to remain under pressure during the reporting period.

Analysts say the full impact of the rise in commodity prices will be felt as deeply felt in 2021. To offset the impact, Maruti Suzuki has already raised prices of select models up to Rs 22,500 in April 2021. This is the second increase in calendar year 2021. Earlier in January, Maruti Suzuki raised prices of select models by up to Rs 34,000 due to rising input costs. However, in the January-March 2021 quarter, ACE equity data show, the stock markets have been an underperformer.

ALSO READ: Former Maruti MD Jagdish Khattar dies at the age of 79 from cardiac arrest

The company is scheduled to report its Q4FY21 numbers on Tuesday 27 April. Expect major brokerage here.

KR Choksi Securities

The volume growth of 28 percent YoY at 492,235 units in revenue will be driven by a faster recovery of 34 percent YoY / 4 percent QoQ. PAT is expected to grow by 51 percent YoY to Rs 1,948.9 crore (Rs 1,996.7 crore in the December 2020 quarter). Ebitda margin is estimated at 9.5 percent in Q4FY21 versus 8.4 percent in the previous fiscal year and 9.4 percent in Q3FY21.

Maruti stock performance

The average selling price is expected to increase by around 3-5 percent due to an increase in product prices, better product mix and lower discounts during the quarter.

Demand for both passenger vehicles (PV), domestic and export, electric vehicle (EV) segment product planning and new model launches, inventory channel status, cost-cutting initiatives and market response for BS-VI compliant vehicles Highlights for mobility monitoring.

Axis Securities

We expected to lead a 31 percent increase in revenue, a 28 percent increase in Q4 FY21, and a 3.5 percent increase in average selling price (ASP). Estimated income before interest, tax, depreciation and amortization (EBITDA), an increase of 39 percent YoY due to cost-cutting initiatives. Although gross margin is likely to be reduced by 320 basis points (bps), the input cost is 26.5 percent on a YoY basis. Profit after tax (PAT) is estimated at Rs 1,768 crore, while revenue for the December 2020 quarter is estimated at Rs 23,877 crore.

Kotak Securities

Revenue is expected to grow by 30 percent in Q4 FY21, an increase of 28 percent during the period under review. We estimate gross margin to decline by 320 bps YoY. Adjusted net profit is Rs 1,850.7 crore, a decline of 4.7 percent QoQ but an increase of about 43 percent.

MK Global

Revenue is likely to increase QoQ due to price increases, lower discounts and more recovery due to a benign mix (greater share of utility vehicles and premium hatchbacks). EBITDA margin is likely to contract at higher input costs. Passenger vehicle (PV) demand continues to boom and many models are in waiting period. Look at PAT for Rs 1,766.7 crore for the period under review, 37 percent yoy, but sequentially down 9 percent.

Brokerage expectations

Brokerage expectations

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