{"id":166568,"date":"2022-11-07T09:37:18","date_gmt":"2022-11-07T09:37:18","guid":{"rendered":"https:\/\/precoinnews.com\/?p=166568"},"modified":"2022-11-07T09:37:18","modified_gmt":"2022-11-07T09:37:18","slug":"maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively\/","title":{"rendered":"Maruti Suzuki’s Q2 result could impact auto sector stocks positively"},"content":{"rendered":"

Maruti’s results and the investor response indicate that quite a few stocks in the auto sector could be on the verge of a big bounce, says Devangshu Datta.<\/strong><\/p>\n

<\/p>\n

A jump in profits allied to optimism on the supply chain led to a bounce in the share price of Maruti Suzuki.<\/p>\n

The company said it sold a record 517,395 vehicles in Q2, 2022-23: domestic sales stood at 454,200, while exports accounted for 63,195 units.<\/p>\n

The firm had sold 379,541 units in Q2, 2021-22, when production was constrained by chip shortages.<\/p>\n

In addition, the company claimed it had pending orders for 412,000 vehicles.<\/p>\n

Maruti’s consolidated revenue came in at Rs 29,943 crore, as against Rs 20,551 crore in the year-ago quarter.<\/p>\n

The Ebitda (earnings before interest, taxes, depreciation, and amortisation) stood at Rs 3,433 crore, as against Rs 1,389 crore in the same period last year.<\/p>\n

The firm’s operating profit had dipped last year due to chip shortages and high commodity prices.<\/p>\n

Efforts at sourcing electronic components, cost-reduction measures, and improving realisations led to much better margins.<\/p>\n

The standalone Ebitda margin rose to 7.2 per cent from just 0.5 per cent, while consolidated PAT (profit after tax) jumped to Rs 2,113 crore from Rs 487 crore a year ago.<\/p>\n

While the firm’s top line was 1.4 per cent ahead of Bloomberg consensus estimate, its net profit was 4.3 per cent ahead of projections.<\/p>\n

<\/p>\n

Even in sequential comparisons, the company’s performance improved considerably over Q1, 2022-23.<\/p>\n

In Q1, Maruti’s consolidated revenue amounted to Rs 26,512 crore, with Ebitda of Rs 2,027 crore and net profit of Rs 1,036 crore.<\/p>\n

The standalone Ebitda margin improved 220 basis points sequentially in Q2.<\/p>\n

Another favourable factor has been the rupee’s strengthening versus the yen, which reduced the cost of imports and other payouts to the parent.<\/p>\n

However, while raw material costs have dropped and the disruption of supply of electronic components has also reduced, power costs have risen and so have advertising and marketing expenses.<\/p>\n

There’s been volume growth in every segment except for mid-size and LCV.<\/p>\n

Mini+ compact sales volume was up 57 per cent YoY and van sales were up 32 per cent, while UV sales were up 10 per cent. Of course, there was a low-base effect but even so, the growth is impressive.<\/p>\n

<\/p>\n

Overall, sales across the passenger vehicles segment, where Maruti is by far the largest player, have improved for most companies, with aggregated volumes growing by 15 per cent quarter-on-quarter (QoQ).<\/p>\n

Chip supply normalisation has been noted for other auto manufacturers as well and raw material costs have fallen.<\/p>\n

The festival season is crucial — analysts will be monitoring rural demand through this period. One bad signal is poor growth in the tractor segment.<\/p>\n

However, Maruti’s huge order book ensures that it is very likely to have another record\/near record quarter in Q3.<\/p>\n

At the sector level, Maruti has lost market share — now it has around 41 per cent compared with over 50 per cent pre-pandemic.<\/p>\n

At the macro level, concerns about global inflation and rising interest rates remain.<\/p>\n

This is an inherently capital-intensive industry and there are always working capital needs even in a scenario of high demand and smart inventory management.<\/p>\n

Maruti’s results and the investor response indicate that quite a few stocks in the auto sector could be on the verge of a big bounce.<\/p>\n

On the NSE, the stock jumped 5.6 per cent on the results, and it’s up 8.8 per cent in the last month and 19.5 per cent in the last year.<\/p>\n

Feature Presentation: Rajesh Alva\/Rediff.com<\/em><\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Maruti’s results and the investor response indicate<\/p>\n","protected":false},"author":3,"featured_media":166565,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"\nMaruti Suzuki's Q2 result could impact auto sector stocks positively - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Maruti Suzuki's Q2 result could impact auto sector stocks positively - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Maruti’s results and the investor response indicate\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-07T09:37:18+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2022\/11\/Maruti-Suzukis-Q2-result-could-impact-auto-sector-stocks-positively.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively\/\",\"url\":\"https:\/\/precoinnews.com\/business\/maruti-suzukis-q2-result-could-impact-auto-sector-stocks-positively\/\",\"name\":\"Maruti Suzuki's Q2 result could impact auto sector stocks positively - 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