Maruti Suzuki reports stellar numbers for Q3FY23

Maruti Suzuki, India’s largest consumer car manufacturer, reported 129.7% higher net profits at Rs2,391 crore for Q3FY23. The spike in profits was driven by calibrated price hikes of core models, sales growth in top-end models and softening commodity prices. On the top line front, the total revenues were up 26.9% yoy at Rs29,918 crore in the quarter. The company also undertook cost reduction measures to improve realizations.

New launches have dominated its demand basket with these new launches accounting for 33% of the total pending customer orders of 363,000 vehicles. Revenues of Maruti were positively impacted by price hikes and better product mix; combined with a surge in demand for top-end models. The net profits were nearly 22% higher than the consensus street estimates of net profits.

The raw material costs as percentage of net sales stood at 78.8%, marginally higher on a yoy basis, indicating that the worst of input costs pressures may be done and dusted. Among existing models, its order book is most robust for the Vitara and the Brezza models. The addition of the recently launched Jimny and Fronx models of Maruti will not only boost the order book but also raise the average selling price (ASP) of the product basket.

Its PV (passenger vehicle market share at 41% in Q3FY23 is 1,100 bps lower than the 52% peak market share recorded in April 2021. Maruti had actually underestimated the demand for sport utility vehicles (SUVs) and is now playing catch up. Premium models and CNG variants are likely to dominate the sales basket of Maruti in coming months. Unit sales in Q3FY23 at 465,911 units were up 8.2% higher on yoy basis.