Maruti Suzuki India, the country’s largest passenger car manufacturer, reported a 9.7 percent year-on-year fall in net profit for the fourth quarter of financial year 2021 at Rs 1,166.1 crore. The fall in net profit was because of lower non-operating income owing to mark-to-market loss on invested surplus.
Here’s how market experts and analysts reacted:
Prakash Diwan, Market Expert
“The market will not be surprised with the profit numbers being slightly off. Maruti has always been trading at a premium when it was at Rs 7,200-7,400 zones. So, from there to around Rs 6,600 is a reasonable level to be priced at."
"It could still start seeming rich if the sale volume drops. My expectation looking at the revenue number is that they would prioritise selling the higher end models rather than the entry level models and that is why revenue number is good and realisations will also be better,” he said.
Also Read: Maruti Suzuki Q4 net profit falls 9.7% to Rs 1,166.1 crore; revenue rises 32% YoY
Aditya Makharia of HDFC Securities
“The automobile demand last year paradoxically was aided by personal mobility. As COVID remains in the second wave, I think this trend will continue, which is why we believe that the volume growth will come in. If the volumes come over maybe 2-4 quarters, you do get pricing back because at some point you can then raise prices."
"If metal prices were to cool off from here, it will provide some support to margins. So we are not very concerned on volumes; one quarter could be a miss but beyond that we do see personal mobility trends sustaining demand,” he said.
Naveen Kulkarni of Axis Securities
“Our earnings estimate will go down slightly. Target price we will have to see how much we will have to cut based on the change in estimates, the margin disappointment, and view on Q1 of FY22 will be critical. But at this point in time I would say that cut in EPS by around 3-4 percent cannot be ruled out."
"As of now we have a buy recommendation, but we will be taking a call post conference call and what we see in terms of the view for the forthcoming quarters,” he said.
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