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videos | IST

Maruti Q1FY22 preview: Street expects earnings to look strong YoY on low base

Maruti Suzuki India will declare its first-quarter numbers today. As per CNBC-TV18 polls, the earnings are expected to look strong year on year because of a low base however on a sequential basis there is quite a bit of pressure. The volumes are down 28% quarter on quarter at three and a half lakh units. If one were to compare it to the pre-pandemic quarter which is Q1 of FY20, the volumes are still down about 12%.
The margins for the company have fallen for two consecutive quarters and will continue to be under pressure on higher commodity prices, for operating leverage and a ramp up the third unit at the Gujarat plant. However, because of lower discounts and a price hike of 1.5 percent, the realisations will rise about 6.5% percent quarter on quarter.
The stocks per se, has not that much, it's up about 10% in the last three months, it is well off its 52 week and that is because the management has been struggling as far as margins are concerned. Volumes as well are down about 30% quarter on quarter.
It would be important to know from the management on what the outlook is going forward and whether there is any pickup in demand or not. The management has been very cautious being that it's due to the impending third wave. The volume growth may not be as may not return to double digits anytime soon.
Street expects the year-on-year numbers to look good because of a low base however there would definitely be pressure quarter on quarter.
For more, watch the accompanying video of CNBC-TV18’s Sonia Shenoy