Shares of Maruti Suzuki India (MSIL) dipped practically 3 per cent to Rs 6,965 on the BSE in intra-day commerce on Thursday, down 4 per cent in previous two buying and selling days, after the automobile and utility automobiles firm reported disappointing numbers for the quarter ended June 2021 (Q1FY22).
The corporate’s complete working earnings declined 26 per cent quarter-on-quarter (QoQ) to Rs 17,771 crore in Q1FY22, as a consequence of a 28 per cent quantity decline to three.53 lakh models. Revenue after tax (PAT) declined 62 per cent QoQ to Rs 441 crore. It had posted a lack of Rs 249 crore within the year-ago quarter. Ebitda (earnings earlier than curiosity, taxes, depreciation, and amortization) margins declined by 367 foundation factors (bps) sequentially to 4.6 per cent.
The corporate mentioned revenue for Q1FY22 was primarily impacted as a consequence of decrease sale volumes. The commodity costs elevated steeply however the firm continued to make efforts to cut back prices.
“The second wave of the pandemic adversely impacted Q1 manufacturing and gross sales. Whereas all parameters this quarter have been considerably higher than Q1 of FY2020-21 (Q1FY21), a comparability shouldn’t be significant as a result of Q1 final yr had a a lot increased diploma of disruption as a result of pandemic. Gross sales in Q1 stay far under the earlier excessive in Q1 of FY2018-19 (Q1FY19),” the corporate mentioned.
MSIL’s efficiency was under expectations on all counts, with margins impacted by improve in all price heads – particularly in case of worker prices, partly as a consequence of one-offs, brokerage ICICI Securities mentioned in a word. “Profitability stress was exacerbated by decrease different earnings. For MSIL, utility automobile (UV) product launch to deal with heightened competitors is a key monitorable, though basic sluggishness on the electrical automobile (EV) alternative is a persistent disappointment,” it added.
One other brokerage Motilal Oswal Monetary Providers mentioned MSIL reported a weak efficiency in Q1FY22, weighed by the influence of the lockdowns on volumes in addition to commodity price inflation. Whereas commodity inflation would persist in 2Q, there are drivers in place for sustained quantity and margin restoration from 2HFY22E. We decrease our FY22E/FY23E EPS by 13 per cent/3 per cent, factoring in additional price inflation in Q2, increased employees prices, and decrease different earnings, it mentioned.