BackMaruti Suzuki Q4FY22 preview: Expect a healthy quarter, PAT likely to record strong growth sequentially
The auto giant is expected to register healthy performance in the quarter led by double-digit growth in net sales, while EBITDA margins are expected to expand driven by operating leverage benefits. Thereby, overall profitability is expected to be strong as well.
PremiumAutomobile manufacturer, Maruti Suzuki is set to announce its financial performance for the quarter and year ended March 31, 2022 (Q4FY22), tomorrow. Ahead of the earnings, on Thursday, Maruti shares witnessed positive sentiment from investors on stock exchanges.
Maruti shares closed at ₹7887.95 apiece up by ₹100.05 or 1.28% on BSE. At the current closing price, Maruti's market valuation stands at ₹2,38,279.24 crore on the exchange.
The auto giant is expected to register healthy performance in the quarter led by double-digit growth in net sales, while EBITDA margins are expected to expand driven by operating leverage benefits. Thereby, overall profitability is expected to be strong as well.
The company's board of directors will also consider dividends on equity shares for the financial year FY22.
What to expect in Q4?
Shashank Kanodia and Raghvendra Goyal, Research Analysts at ICICI Securities expect Maruti to outshine in the OEM pack compared to its peers.
The duo said, "MSIL is expected to report healthy performance in Q4FY22. Net sales for the quarter are expected at ₹25,654 crore, up 15.6% QoQ driven by 13.5% QoQ growth in volumes at 4.89 lakh units & 2% QoQ rise in ASPs to ₹5.25 lakh/unit."
"Product mix for Q4FY22 is slightly adverse with a share of UVs in total volumes at 15.7% vs.~18.3% in Q3FY22," ICICI Securities analysts added.
Further, they said, "EBITDA for the quarter is expected at ₹1,991 crore with EBITDA margins at 7.4%, up 70 bps QoQ driven by operating leverage benefits. Ensuing PAT in Q4FY22 is expected at ₹1,362 crore, up 34.6% QoQ."
On year-on-year, these analysts expect net sales and net profit to rise by 11.7% and 16.8% respectively.
Anish Rankawat Research Analyst, Auto & Auto Ancillaries at Centrum said, " Volume declined 1% YoY. We expect revenue to grow at 8% YoY driven by better ASP growth of 9% YoY on price increases and better mix. EBITDA margin is expected to be flat YoY to 8.4%."
Strong sales in FY22:
The latest data given by Maruti of its sales show that from April 2021 to March 2022 (FY22), the company's total sales are at 1,652,653 units higher than the 1,457,861 units recorded in the fiscal FY21.
In FY22, domestic sales stood at 1,414,277 units increasing from 1,361,722 units in FY21. Of the total, passenger vehicle sales stood at 1,331,558 units against 1,293,840 units sold in FY21.
Exports have been strong in FY22 with sales of 238,376 units nearly 2.5 times higher than 96,139 units sold in FY21.
During March and full-year FY22 sales announcement, Maruti had said that the shortage of electronic components had some impact on the production of vehicles in FY 2021-22. The Company took all possible measures to minimize the impact. As the supply situation of electronic components continues to be unpredictable, it might have some impact on the production volume in FY 2022-23 as well.
Q3FY22:
Maruti had posted a net profit of ₹1,011.3 crore in Q3FY22 lower than ₹1,941.4 crore in the same quarter last year. Sales volume stood at 430,668 units lower than 495,897 units in Q3FY21. Net sales stood at ₹22,1187.6 crore down from ₹22,236.7 crore in Q3FY21.
On a quarter-on-quarter basis, Maruti recorded robust performance. Its PAT rose from ₹475.3 crore in Q2FY22. While sales volumes and net sales also witnessed an upside.
So far in 9MFY22, Maruti's PAT stands at ₹1,927.4 crore versus ₹3,063.6 crore of 9MFY21. Net sales stood at ₹58,284.1 crore higher than ₹43,603.5 crore in 9MFY21.
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