Maruti Suzuki Q1 Review - Coming Out Of Dark Clouds: IDBI Capital
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IDBI Capital Report
During Q1 FY22, Maruti Suzuki India Ltd.’s profit declined by 62.2% q-o-q to Rs 4.4 billion (below our estimates Rs 13.3 billion).
Sharp decline in profitability was attributed to lower Ebitda margins which declined by 367 basis points q-o-q to 4.6% (below our estimates of 8%) and lower other income which declined by 61.5% y-o-y.
Despite poor show in Q1 FY22, We believe, Maruti Suzuki is likely to witness robust volume recovery hereon while cost pressure is likely to ease out post H2 FY22.
To factor in improved business outlook and expected improvement in profitability, we increase our volume and profit after tax estimates by 2.9%/26.7% for FY23E.
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