Maruti Suzuki Q1 Review - Slip In Retail Market Share Hurts Pricing Power: ICICI Securities
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ICICI Securities Report
Maruti Suzuki India Ltd.’s Q1 FY22 earnings were a miss on consensus estimates as Ebitda margin shrunk ~367 basis points QoQ to 4.6%.
Lack of pricing power amid rising market share pressures is clearly visible (Q1 retail market share dropped to ~40%).
Continued product on slaught by competition in sports utility vehicles (e.g. Tata HBX, M&M XUV700 launch in August-September 2021) is likely enhance consumer interest, hence keep Maruti Suzuki’s discounts elevated and price hikes limited.
Consumer preferences continue to rapidly move towards SUV body type (Q1 industry wholesale volume contribution: more than 39%), which impacts the company both at volume and revenue market share levels.
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