Shares of auto giant Maruti Suzuki gained momentum as investors were upbeat about the company’s second quarter performance for FY13. Earlier, Maruti shares hit a new 52-week high on Friday after quadrupling its profitability in the September 2022 quarter. Maruti shares are said to have risen between 5-6% on the exchanges during the closing hours. This will be the auto major’s biggest gainer on exchanges in 4 months. In Q2FY23, Maruti outperformed road estimates with better-than-expected gross margins, financial performance backed by higher other income and lower tax rate.
on BSE, Maruti shares closed 9,494.10 each 448.05 or 4.95%. The market cap of the company is approx. 2.87 lakh crore. Here, the shares hit a new 1-year high 9,548 each.
At the same time, Maruti shares closed on NSE. up by 9,548 each 506.05 each, an increase of 5.06%. shares Closed near fresh 52-week high 9,549.95 each on the exchange.
In Q2FY23, the company posted a net profit of More than 4 times the PAT of Rs 2,061.5 crore — 475.3 crore in the same quarter last year. Net sales jump 47.9% 28,543.5 crore in Q2FY23 19,297.8 crore in the second quarter of the last financial year.
Meanwhile, the company’s operating profit rose by 1,971.15%. 2,046.3 crore in Q2FY23 98.8 crore in Q2FY22.
On operating profit, Maruti said, “Operating profit in Q2 of last year declined sharply due to sharp rise in commodity prices and shortfall in electronic component supply and hence Q2 FY2022-23 results Q2 FY2021-22.” The company is simultaneously striving to improve its margins by improving the availability of electronic components, cost reduction and recovery from the market.”
Further, in its audit report, Maruti said, the company sold a total of 517,395 vehicles during the quarter, which is the highest in any quarter. Sales in the domestic market stood at 454,200 units. Exports stood at 63,195 units. The shortage of electronic components affected production of around 35,000 vehicles in the quarter. There was a severe shortage of electronic components in the corresponding period of last year and as a result, the company could sell a total of 379,541 units, which included 320,133 units in the domestic and 59,408 units in the export markets.
As of the end of Q2FY23, Maruti had around 412,000 pending customer orders, out of which around 130,000 vehicle pre-bookings are for the recently launched models.
On Maruti’s Q2 performance, Mansi Lal – Research Associate, Prabhudas Lilladher said, “Volumes grew by 11% QoQ at 517k units for the quarter. This is coupled with better-than-expected ASPs ( Revenue growth of 578k, +2% QoQ), 13% QoQ (revenue at .) 299k vs PLE: 297.5k). Gross margin positively surprised our estimates of 26.9% (+150bps QoQ) versus 25.7%. The company highlighted that the reason for this is the softening of commodity prices.”
In addition, Lal said, “softening commodity prices due to favorable foreign exchange variation, cost reduction efforts, and EBITDA margin expansion of 210bps QoQ. EBITDA margin came in at 9.3% versus our/street estimate of 9.0%. Other income.” 6.1 billion ( 5.2 billion year-on-year, 885 million qoq) came in more than expected. Lower tax rate at 21.6% (23.4% QoQ) led to a PAT increase of 103% QoQ; Pat et 20.6 billion versus PLE: 16.5 billion.”
Further, Lal’s note said, “The performance of Maruti Suzuki 2Q was better than the road estimates. Its new models – New Brezza, New Baleno and Vitara are gaining good traction. Around 412k vehicles at the end of pending customer orders.” quarter, of which 130k units for the newly launched model. The company has addressed the white spots in its portfolio through the launch of Brezza and Grand Vitara. However, high competition in the SUV space and slow revival in the entry segment Still a concern. Production levels are almost back to normal levels for the company as the chip issue has been largely addressed.”
However, the analyst also said, “Market share remains significant for Maruti due to competitive intensity in the UV space. Maruti has lost significant market share over the years (41% in Sep-22YTD vs 41% in FY19). 51%).”
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