Maruti Suzuki, TVS Motor, SBI Cards, Colgate, Supreme Industries & More Q3 Results Review: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .HDFC Securities Institutional Equities.Maruti Suzuki India Ltd. - Strong All-Round BeatMaruti Suzuki’s Q3 profit after tax, at Rs 23.5 billion, came in above our estimate of Rs 18 billion, led by better-than-expected average selling price and higher other income. Ebitda margin improvement QoQ came in despite the 10% decline in volume and higher sales promotion expenses, which is commendable, in our view. Maruti Suzuki remains committed on regaining leadership position in SUVs, which is evident in its model-onslaught in this fiscal: post the mid-cycle upgrades of Ertiga and XL6 (Q1), new Brezza and the recently-launched Grand Vitara (Q2), it has now commenced bookings for Jimny (received 9000 bookings) and Fronx (2500 bookings). .TVS Motor Company Ltd. - Stable Performance In Adverse Macro TVS’ Q3 profit after tax, at Rs 3.5 billion, was in line with our estimate although the Ebitda margin was lower than our estimate as benefits from better-than-expected ASP were more than offset by the impact of lower volumes and higher electric vehicle sales. TVS continued to outperform peers for year-to-date-FY23:it gained 40 bps market share in motorcycles to 8.2%,in scooters, it is the biggest gainer and its market share is up 260 bps to 23.4%,in exports, while the two-wheeler industry volume is down 12%, TVS exports were down 7%. With supply challenges now largely over, we expect TVS’ outperformance to continue on the back of the ramp-up of its launches, including the new Ronin and Raider..SBI Cards and Payment Services Ltd. - Franchise Needs ‘Patient’ Portfolio RebalancingSBI Cards’ earnings missed estimates on account of sharp net interest margin compression (down 70 bps QoQ) and regulatory impact on fees (over-limit charges lower by Rs 0.8 billion). Revolve rates continue to remain sub-par (~65% of pre Covid levels); however, a higher focus on instalment loans drove the EMI portfolio higher by ~200 bps in the overall receivables mix, offering marginal respite. Funding costs witnessed a sharp uptick (~90 bps) due to rising interest rates and liquidity coverage ratio norms (more than 70% plus)..Colgate Palmolive India Ltd. - Muted Show; Healthy Gross Margin Improvement Colgate reported a miss in revenue, registering 1% growth, as compared to our expectation of 4%. Three-year revenue CAGR was at 4.1% (up 5% in Q3 FY22 and 4.3% in Q2 FY23). Domestic revenue was up by 2% YoY. Volumes were down by ~4% (our estimate: flat), with three-year volume CAGR at 1.1% (0.8% in Q2 FY23). Gross margin was at 65.9% versus 63.8% in Q2 FY23 and 66.6% in Q3 FY22, better than our expectation of 64.8%..Supreme Industries Ltd. - Robust Uptick In Pipe Volumes; Healthy Outlook Supreme reported healthy performance in Q3 FY23, driven by a strong volume uptick (in pipes and industrial segments) and stabilisation in resin prices. The pipe segment margin was 13.5% in Q3 (suffered 2% due to inventory loss); in Q4, an inventory gain is expected. For FY23, Supreme Industries has increased its overall volume growth guidance to 25% (pipes: ~35%) with a ~12.5% Ebitda margin. We expect the recent cool-off in resin prices (which is getting passed on) to boost demand..Click on the attachment to read the full report:.Maruti Suzuki Q3 Results: Profit Beats Analysts Estimate.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Maruti Suzuki, TVS Motor, SBI Cards, Colgate, Supreme Industries & More Q3 Results Review: HDFC Securities

Maruti Suzuki’s Q3 PAT, at Rs 23.5 bn, came in above our estimate, led by better-than-expected ASP, higher other income.

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