Maruti Suzuki Q3 Results Review  — E Vitara Price Point Key To Watch For; Yes Securities Maintains 'Buy'

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Yes Securities Report

Maruti Suzuki India Ltd.’s Q3 FY25 results were steady and in-line as gross margins came in-line at 28.4% (- 70 bp YoY/ +30bp QoQ). However, against topline growth of ~3.5% QoQ, Ebitda growth was flat at ~1% at Rs 44.7 billion (estimate: ~Rs 47.5 billion) led by;

1. ~40 bp drag due to higher A&P,

2. ~40bp raw material impact,

3. increased discounts (on wholesales) at ~Rs 31,000/unit (versus Rs 29,300/unit in Q2 and ~Rs 21,700/unit in Q1 FY25) at ~4.6% of ASP. This led Ebitda/vehicle came offpeak at ~Rs 79,000/unit (+1% YoY/-3.2% QoQ).

Going ahead, increase in share of CNG, peak average discounts led by optimal inventory, stable raw material and favorable mix are the positive margins triggers as volumes are likely to be stable led by industry growth dynamics. Maruti Suzuki would likely outperform the industry led by strong CNG portfolio with ~33% contribution (vs ~33% in Q2 FY25 and Q1 FY25, ~26.9% in Q4 FY24 versus 30.2% in Q3 FY24).

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