Earnings Outlook
Better volume, realisations to drive Maruti Suzuki's Jan-Mar revenue
This story was originally published at 18:15 IST on 22 April 2025
Register to read our real-time news.Informist, Tuesday, Apr. 22, 2025
By Anand JC
NEW DELHI – Maruti Suzuki India Ltd.'s revenue for the March quarter likely grew in mid-to-high single digit, mainly due to improved wholesale sales and increased realisations, according to analysts. While domestic demand for cars remained subdued, robust growth was seen only in the Fronx maker's wholesale export volumes - flagging the weakness in India's end-market demand.
Nonetheless, increased despatches and price hikes likely benefited Maruti Suzuki's top line. The revenue of the country's top passenger car manufacturer for the reporting quarter is expected to be INR 411.5 billion, according to an average of views of 14 brokerage houses. Its revenue is expected to grow 8% on year and 7% sequentially.
Maruti Suzuki's net profit for the latest quarter is expected to be INR 38.5 billion, consensus estimates show. This translates to a 0.7% contraction year-on-year but a 9.3% growth sequentially. Emkay Global Financial Services Ltd. expects the bottom line to fall as much as 17% year-on-year.
Its earnings before interest, taxes, depreciation, and amortisation for the latest quarter could grow 5.6% on year to INR 49.5 billion, according to an average of 12 analysts' estimates.
Their EBITDA margin is expected to fall 44 basis points from the base quarter due to higher marketing and advertisement spending and higher discounts, Axis Securities said in a report. Centrum Broking has forecast a fall of 35 bps in the EBITDA. The fall in margin could be restricted by operating leverage and increased sales of cars running on compressed natural gas. Maruti Suzuki's EBITDA margin for the base quarter was 12.3%.
Analysts at Motilal Oswal Financial Services Ltd. expect a sharper 70 bps fall year-on-year in the EBITDA amid the foreign exchange volatility during the reporting quarter and spending incurred by the Swift-maker for the Bharat Mobility automobile expo in January. In addition, Maruti Suzuki's depreciation expenditure likely inched up in the reporting quarter due to the commissioning of the Kharkhoda facility, the brokerage said in a note.
Sales Scenario
In recent years, Maruti Suzuki has pivoted its product mix more towards larger passenger vehicles to meet the increased preference of Indian consumers for utility vehicles. This strategy has paid off, sales data show. In 2024-25 (Apr-Mar), the company sold 720,186 utility vehicles, up 12% on year. In the same financial year, it sold 904,909 passenger cars to dealers, a contraction of 8% on year.
"(Maruti Suzuki) has offset the drag in hatchback and sedan segments by increasing its presence in UVs, which contributed ~39% to domestic sales in FY25 vs 35% in FY24. Additionally, MSIL continues to deliver strong growth in international markets with high penetration of UVs in its volume, leading to higher ASP in domestic as well as international markets," Prabhudas Lilladher said in a note.
While the strategy may have helped realign its product mix, overall sales growth paints a prosaic picture. Maruti Suzuki sold 604,635 units in the March quarter, up 4% on year. Similar to a trend seen in other auto companies' sales, exports have grown at a faster clip compared to domestic sales. In Maruti Suzuki's case, domestic wholesale sales grew only 1.1% on year while exports expanded 8%. Despite discounts, retail enthusiasm remained muted. This is evidenced by an increase in inventory at dealerships to 50-55 days.
Automobile companies were forced to hike prices to pass on compliance costs, despite subdued demand for automobile units. Kotak Institutional Equities and Equirus Securities expect the average selling price of Maruti Suzuki to inch up 3% year-on-year in the March quarter due to a richer product mix. The average selling price of Maruti Suzuki's cars in the base quarter was INR 661,868, which increased to INR 679,817 in the December quarter, as per Motilal Oswal. Analysts at KR Choksey Research have forecast a 4.5% on year increase in realisations.
Maruti Suzuki remains the preferred automotive original equipment manufacturer for many analysts as it offers multiple powertrain options. In addition, it is a domestic-facing stock, which alleviates worries amid the ongoing uncertainty caused by US tariffs. The company will disclose its March quarter earnings on Friday.
Tuesday, shares of Maruti Suzuki closed at INR 11,734 on the National Stock Exchange, down 0.1% from the previous close. Since reporting its December quarter earnings on Jan. 29, shares of the company have depreciated roughly 2%.
Following are the Jan-Mar earnings estimates for Maruti Suzuki India Ltd. based on reports from 14 brokerage firms in descending order by the estimate of net profit:
|
Brokerage |
Net sales (in INR mln) |
Net profit (in INR mln) |
EBITDA (in INR mln) |
|
KR Choksey Research |
429,159.00 |
43,093.00 |
56,220.00 |
|
Equirus Securities Pvt Ltd |
408,082.00 |
40,242.00 |
49,009.00 |
|
Centrum Broking Ltd |
413,157.00 |
39,727.00 |
49,166.00 |
|
JM Financial Institutional Securities Pvt Ltd |
412,355.00 |
39,703.00 |
51,638.00 |
|
Nomura Equity Research |
409,435.00 |
39,617.00 |
50,821.00 |
|
HSBC Global Research |
415,826.00 |
39,251.00 |
48,546.00 |
|
Nuvama Wealth Management Ltd |
410,159.00 |
39,118.00 |
49,787.00 |
|
Prabhudas Lilladher Pvt Ltd |
414,986.00 |
38,928.00 |
49,283.00 |
|
Anand Rathi Share and Stock Brokers Ltd |
408,829.00 |
38,757.00 |
|
|
Axis Securities Ltd |
411,280.00 |
38,460.00 |
48,590.00 |
|
Kotak Institutional Equities |
410,363.00 |
37,623.00 |
48,316.00 |
|
Elara Securities (India) Pvt Ltd |
408,986.00 |
37,358.00 |
48,571.00 |
|
Motilal Oswal Financial Services Ltd |
398,197.00 |
35,039.00 |
46,139.00 |
|
Emkay Global Financial Services Ltd |
410,748.00 |
32,238.00 |
47,515.00 |
|
Average |
4,11,540.14 |
38,511.00 |
49,507.77 |
End
Edited by Deepshikha Bhardwaj
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