Maruti Suzuki - Q4FY13 Result Preview - Angel Broking

Maruti Suzuki (MSIL) is scheduled to announce its 4QFY2013 results today. We expect MSIL to post a strong operating performance for the quarter driven by better product mix, operating leverage benefits and favorable currency movement. We expect the top-line to register a growth of ~10% yoy (~15% qoq) to Rs. 12,930cr led primarily by 16% yoy (~2% qoq) growth in net average realization following superior product-mix and price increases. However, volumes are expected to decline ~5% yoy led by weak demand for entry segment cars.

We expect the EBITDA margin to improve by ~130bp yoy (~60bp qoq) to 8.6% driven by favorable currency movement and operating leverage benefits. As a result, the bottom-line is expected to register a strong growth of ~13% yoy to Rs. 722cr. At the CMP of Rs. 1,590, the stock is trading at 15.5x FY2015 earnings. The stock has rallied by ~25% in the month of April 2013 on the expectations of a strong earnings growth going ahead led by continued depreciation in JPY against the INR which is expected to boost the operating margins.

Currently, we have a Neutral rating on the stock.

Source : Equity Bulls

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