Maruti shares fall ahead of Q1 results; analysts see sharp fall in profits

NEW DELHI: Shares of Maruti Suzuki fell 1 per cent in Friday’s trade as the auto major is expected to report a weak set of June quarter results later in the day. As per Bloomberg consensus estimate, Suzuki’s Indian arm is seen reporting 32 per cent drop in profit to Rs 1338.90 crore. Net sales are seen falling 12.57 per cent to Rs 19,068.15 crore.

The stock fell 1.30 per cent to Rs 5,685.15 per cent on BSE.

ICICI Securities said it expects Maruti Suzuki to post the steepest Ebitda decline of around 47 per cent due to negative operating leverage, weak product mix and higher discounts. It expects profit decline to be around 43 per cent, even as higher other income supports. It sees revenue declining 16 per cent as volumes were down around 18 per cent while discounts are expected to remain high.

Kotak Institutional Equities expects the company’s adjusted profit to drop 26.2 per cent year-on-year. It expects revenues to decline 14 per cent due to 18 per cent fall in volumes. The weakness will be partially offset by 4 per cent increase in average selling prices (ASPs) of vehicles sold.

Reliance Securities expects the carmaker to post a 48 per cent drop in profit and pointed that volumes may decline 12.5 per cent and realisation is expected to fall 1 per cent due to product mix, which would pull down revenue by 13.5 per cent.

The key moniterables are discounting trends, updated on dealer delinquencies, demand outlook and guidance for FY20, colour on agreement details with Toyota Kirloskar Motor,” ICICI Securities said in a note.