Maruti Suzuki hits new life-time highs on result expectations

Shares of Maruti Suzuki India were trading higher by 2% at a life-time high of Rs Rs 4,120, extending their nearly 3% gains in the past two trading sessions on the BSE, on expectations of strong financial results for the quarter ended June 30, 2015 (Q1).

The stock has hit a record high of Rs 4,138 in intra-day so far. The stock has rallied 24% thus far in 2015, compared to a sub-2% rise in the S&P BSE Sensex.

Edelweiss Securities expects Maruti Suzuki to report a healthy 76% year on year (y-o-y) jump in its adjusted net profit at Rs 1,343 crore for the April-June quarter.

“We expect revenue growth of 19% YoY led by 14% growth in overall volumes. EBITDA (earnings before interest tax depreciation and amortization) margin is likely to expand 70 basis points QoQ to 16.5% on benign commodity, favourable currency and stable discounts,” an Edelweiss Securities analyst said in a results preview.

“We forecast a 14% yoy growth in volumes this quarter. We expect the product mix to improve sequentially led by higher share of Swift and Dzire sales in the mix. We estimate EBITDA margin to improve by 50 bps qoq. We project a healthy 75% yoy rise in net profits in 1QFY16,” according to an analyst at Kotak Institutional Equities Research.

Meanwhile, Antique Stock Broking expects new launches in the domestic portfolio in coming months such as the SX4 Cross, LCV, etc to drive bulk of FY16 growth.

Maruti Suzuki India Limited