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What should investors do with Maruti Suzuki after Q1 results: buy, sell or hold?

What should investors do with Maruti Suzuki after Q1 results: buy, sell or hold?
July 29
16:04 2021

Maruti Suzuki Q1 results: Revenue for the quarter jumped more than four times to Rs 17,770.7 crore against Rs 4,106.5 crore in Q1FY21.

Maruti Suzuki India | Representative image

Maruti Suzuki India | Representative image

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Maruti Suzuki share price open in the red on July 29, a day after the company declared its June quarter results.

The automaker on July 28 posted its June quarter net profit at Rs 440.8 crore against a Rs 249.4 crore loss in the same quarter last year. Revenue for the quarter jumped more than four times to Rs 17,770.7 crore against Rs 4,106.5 crore in Q1FY21.

Q1FY22 EBITDA came in at Rs 821 crore versus an EBITDA loss of Rs 863.4 crore last year.

The company sold a total of 3,53,614 units during the June quarter. Sales in the domestic market stood at 3,08,095 units while exports were at 45,519 units.

The stock was trading at Rs 7,054.75, down Rs 95.45, or 1.33 percent. It has touched an intraday high of Rs 7,120.00 and an intraday low of Rs 7,051.70.

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Here is what brokerages have to say about the stock and the company after Q1 earnings:

Bernstein | Rating: Outperform | Target: Rs 7,850

Q1 results reflect challenges on multiple fronts. Commodity prices continue an uptrend and not fully offset by price increase in recent months. COVID-related production disruption impacted operating leverage.

Commencement of provisioning for wage revision in a weak quarter was an additional impact. Management commentary indicated recovery in overall demand.

Morgan Stanley | Rating: Overweight | Target: Rs 8,307

The company reported troughs in margin, volumes and model cycle keep us overweight. P/E in context of depressed earnings is also attractive.

Kotak Institutional Equities | Rating: Sell | Target: Rs 6,000

Q1 EBITDA of 5% was below our expectations due to higher input costs and employee expenses. Volume growth outlook remains strong given strong order backlog. We maintain sell as we are concerned on market share loss in SUV segment and rich valuations.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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