Maruti Suzuki Q3 Results Review - Better Mix Drives Positive Earnings Surprise: ICICI Securities
Maruti Suzuki’s Q3 Ebitda margin was largely inline our estimate, driven by raw material cost benefit, favorable currency movement
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ICICI Securities Report
Maruti Suzuki India Ltd.’s Q3 FY23 Ebitda margin at 9.8%, up 50 basis points QoQ, was largely in line our estimate, driven by raw material cost benefit and favourable currency movement. Average selling price was up 8% QoQ through better mix as there was lower proportion of mini cars, higher share of utility vehicles (up ~500 bps QoQ) and introduction of the higher-end UV model Grand Vitara.
Maruti Suzuki's volumes were down 10% QoQ due to post-festive season destocking of entry-level cars and half-yearly production shutdown in Dec-22, which was made up partly through the 8% rise in blended ASP. With limited drivers of total cost of ownership inflation and new launches like Fronx and Jimny, we maintain our FY24E volume at 2.2 million, up 10% from FY23E levels.
Blended discount inched up QoQ by ~Rs 5,000/unit due to weakness in entry-level car sales and higher retail units sold. Keeping our FY24E earnings largely unchanged, we increase our ASP estimate by ~4% and also cut Ebitdam by 100 bps to ~11.5%.
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