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Maruti Suzuki Q1FY27 Results

• Revenue grew by 36% y-o-y to Rs 52,456 crore (inline with consensus) aided by strong volume growth of 29% y-o-y during the quarter while price hikes helped realisations improve 5.5% y-o-y to Rs 7,31,771.
• Raw material costs increased by 46% y-o-y impacting EBITDA, which reduced by7% y-o-y and 30% q-o-q to Rs. 4,311 crore, with EBITDA margins declining 376bps y-o-y and 352bps q-o-q to 8.2% (vs a consensus of 9.7%) which is primarily due to change in billing methodology to compensate suppliers for sharp jump in raw material prices.
• Profitability reduced 12% y-o-y and 8% q-o-q to Rs. 3,352 crore which was due to the trickle down effect of higher input costs. PAT margin reduced by 343bps y-o-y and 58bps q-o-q to 6.4%.
• Management clarified that the price hikes should have a positive effect in coming quarters and Q2 and Q3 to be better than Q1 aided by softening of raw material costs.
• We believe that the increase in capacity will further help the company capture market share across all segments while price hikes will help margin recovery in coming quarters.
• We maintain a Positive rating with a price target of Rs.16,221, implying an upside of 14%.

Results Highlights (Rs. Cr.)

Margin profile (%)