Maruti Suzuki - Result Review - Angel Broking

For 1QFY2014, Maruti Suzuki (MSIL) reported in-line results on the operating front; however net profit was lower than our estimates on account of higher depreciation expense (due to SPIL merger) and also due to higher tax rate (at 25.3% as against expectations of 21%). The quarterly results are not comparable on a yoy as well as sequential basis as 1QFY2014 results reflect the impact of the consolidation of Suzuki Power Train India (SPIL) operations.

The top-line for the quarter declined 5.1% yoy to Rs.10,237cr and was in-line with our estimates of Rs.10,284cr. The top-line performance was aided by a strong growth of 5.4% yoy in net average realization driven by better product-mix and price increases partially offset by higher discounts. Volumes however posted a decline of 10% yoy due to slowdown in demand in the domestic (down 6.8% yoy) as well as export (down 35.4% yoy) markets. On the operating front, EBITDA margins stood at 11.4% (significant expansion of 410bp yoy), in-line with our estimates, largely led by favorable impact of forex movement and also supported by the ongoing cost reduction initiatives and re-distribution of expenses owing to the SPIL merger. As a result, net profit surged 49% yoy to Rs.632cr. We shall release a detailed result note soon. Our rating is currently Under Review.

Source : Equity Bulls

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