Revenue from operations in Q3 grew 2 percent to Rs 19,668.3 crore in quarter-ended December 2018 despite tepid sales volumes, driven by price realisation.
Shares of Maruti Suzuki touched a 52-week low of Rs 6,324.35, down 3 percent in the early trade on January 28 after the company announced poor set of numbers for the quarter ended December 2018.
The company's profit for the third quarter plunged 17 percent year-on-year to Rs 1,489.3 crore against Rs 1,799 crore in a year ago period.
Revenue from operations in Q3 grew 2 percent to Rs 19,668.3 crore in quarter-ended December 2018 despite tepid sales volumes, driven by price realisation.
Realisations per car during the quarter increased 2.6 percent to Rs 4,58,850 in Q3FY19 compared to Rs 4,47,290 in the third quarter of last year.
Brokerage: CLSA | Rating: Buy | Target: Cut to Rs 8,500
According to CLSA the weak Q3 owing to weak rupee, higher commodity costs and increased discounts. IT expect the impact of commodity prices, discounts and operating leverage to ease going ahead.
The demand is still subdued, but expect a gradual recovery, while two recently upgraded models should provide some volume boost.
It cut FY19-21 EPS by 7-10 percent on lower volumes and margin
Brokerage: Macquarie | Rating: Outperform
Company's Q3 EBITDA margin declined to 10.5 percent against an estimate of 13.5 percent. It expects operating margin to improve in Q4 & FY20, led by higher sales and volume.
Brokerage: Citi | Rating: Buy | Target: Cut to Rs 7,600
The other income of the company came in substantially higher cushioning EBITDA miss. The EBITDA margin estimate for FY19-21 has been cut by 80-110 bps.
It cut EPS estimates by 5-9.2 percent.
The company remains top pick from the sector and should see substantial improvement from Q4.
Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 6,400
According to Deutsche Bank, the results reflect weak market conditions, while recovery is likely to be gradual. Brokerage reduces the EPS forecasts by 7-10 percent.
It feels that volume in ‘Zero Discount’ category may fall to 15 percent in FY20 from estimates of 40-45 percent in FY18. Also, margins should normalise in Q4 but market growth remains the main trigger.
It expects 7 percent India volume CAGR, which would translate into an EPS CAGR of 13 percent.
Brokerage: Kotak Institutional Equities | Rating: Buy | Target: Cut to Rs 7,600
The firm believes that company's operating margins will revive in coming quarters. It cut earnings estimates by 5 percent over FY20-21 driven by a cut in EBITDA margin forecast.
At 0956 hours, Maruti Suzuki India was quoting at Rs 6,362.00, down Rs 154.35, or 2.37 percent on the BSE.
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