Q1 results preview: Auto sector to post healthy revenue, PAT growth driven by volumes, favorable mix, operating leverage

  • Q1 results preview: Auto demand in the quarter ended June 2024 remained strong. Auto OEMs reported volume growth of around 10% year-on-year (YoY) in Q1FY25, with broad-based growth in almost all the segments.

Ankit Gohel
Published8 Jul 2024, 03:07 PM IST
Q1 results preview: Auto sector to post healthy revenue, PAT growth driven by volumes, favorable mix, operating leverage
Q1 results preview: Auto sector to post healthy revenue, PAT growth driven by volumes, favorable mix, operating leverage(Photo: REUTERS)

Automobile companies are expected to report decent earnings growth during the first quarter of FY25 led by robust demand momentum. While auto sector Q1 results may see strong revenue growth, operating performance is also expected to improve on the back of a favorable product mix and operating leverage.

Auto demand in the quarter ended June 2024 remained strong. Auto OEMs (Original Equipment Manufacturers) reported volume growth of around 10% year-on-year (YoY) in Q1FY25, with broad-based growth in almost all the segments.

Two-wheeler segment outperformed with 11% YoY growth, followed by Passenger Vehicles (PVs) with 6% YoY growth. Commercial Vehicles (CV) and tractors grew by 4% each during the April-June quarter.

Brokerage firm Motilal Oswal Financial Services expects a volume CAGR of 9%, 6% and 5% for two-wheelers, PVs and Tractors over FY24-26. For three-wheelers and CVs, it anticipates a volume CAGR of 8% and 7% over the same period.

Also Read | Q1 preview: FMCG sector may see improving volume and value growth trends

Revenue, EBITDA and net profit for auto companies under MOFSL coverage universe is expected to grow 9%, 14% and 18% YoY during the quarter. EBITDA margin for our Auto OEM universe (excluding JLR) is expected to improve 170 bps YoY at 13.1%, driven by moderate commodity costs on YoY basis, a favorable product mix and operating leverage.

Here are Q1 result previews of top auto companies:

Maruti Suzuki Q1 Results Preview

Maruti Suzuki India, the largest passenger car maker in the country, saw a volume growth of 5% YoY in Q1FY25, driven by visible traction in Utility Vehicles (29% YoY growth) even as entry-level models declined 4% YoY. Maruti Suzuki's Q1 revenue is estimated to grow 8.3% YoY to 35,019 crore, while net profit is likely to jump 38% YoY to 3,427 crore, according to Motilal Oswal.

EBITDA margin likely to expand 280 bps YoY to 12% over a low base and due to lower raw material costs, improved mix and operating leverage benefit.

Also Read | Q1 results preview: IT sector revenue growth expected to improve sequentially

Tata Motors Q1 Results Preview 

Tata Motors’ India business performance was a mixed bag as CV volumes grew 6% YoY and PVs declined 1% YoY. The company’s consolidated revenue is expected to rise 1.1% to 1.03 lakh crore, while it is likely to post 8.5% YoY net profit growth in Q1, as per the brokerage estimates.

However, Tata Motors' CV and PV EBIT margin is likely to contract 190 bps and 50 bps QoQ due to lower volumes. Jaguar Land Rover (JLR) volumes are expected to see 3% YoY growth. Motilal Oswal estimates an EBIT margin of 7.5% (down 170 bps QoQ) for JLR, led by unfavorable product mix, rising spends and lower volumes.

Also Read | Q1 Results Preview: GAIL, Petronet LNG to lead oil & gas; weak quarter for OMCs

Mahindra & Mahindra (M&M) Q1 Results Preview

M&M posted a volume growth of 13% YoY in autos and 6% YoY in tractors, leading to an overall volume growth of 11% YoY during the quarter ended June 2024. M&M’s revenue in Q1FY25 is expected to rise 16.6% and net profit by 7.5% YoY. The brokerage also expects a 40 bps YoY gain in EBITDA margin due to favorable mix.

Hero MotoCorp Q1 Results Preview

Hero MotoCorp is estimated to report 21% YoY growth in Q1 operating revenue to 10,600 crore, according to Motilal Oswal. The company’s volumes grew 13% YoY during the quarter, driven by recovery in rural regions and traction due to new product launches.

Net profit is expected to jump 32% YoY to 1,240 crore, while better product mix and healthy volumes should drive EBITDA margin expansion of 130 bp YoY to 15.1%.

Also Read | Q1 preview: Expect banking sector to see healthy loan growth with NIM pressure

Bajaj Auto Q1 Results Preview

Bajaj Auto’s domestic and exports volumes grew 7.3% YoY in Q1FY25 and the company continues to enjoy the benefit of a rich mix in domestic motorcycles, while export markets are seeing a gradual recovery.

Motilal Oswal expects Bajaj Auto Q1 revenue to grow 16% to 12,508 crore and net profit to rise 17% YoY to 2,146 crore. EBITDA margin is estimated to expand by 100 bps YoY to 20.1% led by lower input costs, improved mix and operating leverage benefits.

TVS Motor Company Q1 Results Preview

TVS Motor Company reported domestic two-wheeler volumes growth of 15% YoY, while exports growth of 16% YoY in Q1FY25. Electric Vehicles (EV) volumes grew 34% YoY. TVS Motor Q1 revenue is expected to rise 17% and net profit to grow by 25% YoY. The brokerage expects EBITDA margin to expand 40 bps QoQ at 11.7% led by operating leverage and favorable product mix.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:8 Jul 2024, 03:07 PM IST
Business NewsCompaniesCompany ResultsQ1 results preview: Auto sector to post healthy revenue, PAT growth driven by volumes, favorable mix, operating leverage

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel share price

    165.50
    10:02 AM | 7 OCT 2024
    -1.25 (-0.75%)

    Bharti Airtel share price

    1,652.05
    10:02 AM | 7 OCT 2024
    11.3 (0.69%)

    Bharat Electronics share price

    271.50
    10:02 AM | 7 OCT 2024
    -5.7 (-2.06%)

    Tata Power share price

    452.55
    10:02 AM | 7 OCT 2024
    -14.15 (-3.03%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Coforge share price

    7,220.20
    09:49 AM | 7 OCT 2024
    97.05 (1.36%)

    Dr. Lal Pathlabs share price

    3,453.55
    09:49 AM | 7 OCT 2024
    -40.7 (-1.16%)
    More from 52 Week High

    Vodafone Idea share price

    9.14
    09:49 AM | 7 OCT 2024
    -0.66 (-6.73%)

    Bombay Burmah Trading Corporation share price

    2,590.60
    09:48 AM | 7 OCT 2024
    -174.65 (-6.32%)

    Jubilant Ingrevia share price

    752.95
    09:49 AM | 7 OCT 2024
    -41.3 (-5.2%)

    Rail Vikas Nigam share price

    468.80
    09:49 AM | 7 OCT 2024
    -24.3 (-4.93%)
    More from Top Losers

    Astrazeneca Pharma India share price

    8,008.55
    09:49 AM | 7 OCT 2024
    576.05 (7.75%)

    Home First Finance Company India share price

    1,292.55
    09:49 AM | 7 OCT 2024
    47.2 (3.79%)

    NBCC India share price

    116.90
    09:49 AM | 7 OCT 2024
    4.2 (3.73%)

    Nuvama Wealth Management share price

    6,111.05
    09:49 AM | 7 OCT 2024
    211.8 (3.59%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      77,685.000.00
      Chennai
      77,691.000.00
      Delhi
      77,843.000.00
      Kolkata
      77,695.000.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.75/L0.00
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00

      Popular in Companies

        HomeMarketsloanPremiumMint Shorts