Maruti Suzuki Q1 Review - Weak Quarter; Input Cost Pressure Continues: Systematix
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Systematix Research Report
Maruti Suzuki Ltd.'s Q1 FY22 adjusted Ebitda margin of 4.8% was below consensus and our estimate due to a weaker-than-expected gross margin and operating deleverage as lockdown 2.0 hit production.
Profit after tax was 50% below estimate due to lower treasury income.
The management highlighted that demand trends indicate signs of recovery in July with order booking at 85% of the Q4 FY21 average.
The demand for compressed natural gas variants has seen a sharp uptick as fuel prices have inched up (detailed channel check note); Maruti Suzuki’s inability to increase its CNG production in Q1 FY22 hurt its retail market share (40% versus 47% in FY21).
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