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Prabhudas Lilladher Report
Maruti Suzuki India Ltd.’s Q2 FY22 Ebitdam disappointed at 4.2%, led by soaring raw material costs (250 basis points impact) and low production levels (116,000 units) regardless of three price hikes over H1 FY22 (~1.9% in September 2021).
Despite strong demand, orders remained unfulfilled due to production cut of 60%/40% in Sep-21/October 2021.
Further, Q2 market share declined to 43% versus 48% of FY21 due to new product launches from competitors and rising demand in sports utility vehicle segment.
Exports outlook, however, remains strong with pickup in Africa and other export markets.
We reduce our earnings estimates of Maruti Suzuki by ~13%/8% for FY22/23 to factor in lower volumes and weak Q2 FY22 results.
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