Maruti Suzuki Q3 Results: Margin expansion aided by lower costs; Exports the highest ever

EBITDA margin for the quarter stood at 11.7%, compared to the 11.8% estimate. On a year-on-year basis, the EBITDA margin expanded by 190 basis points.

The management attributed the year-on-year margin improvement to softening commodity prices, improved capacity utilisation, improved realisations and cost reduction efforts, which were partially offset by higher sales promotions and advertising expenses.

Maruti's volumes for the quarter had grown by 8% compared to the same period last year.

The company mentioned that this is the highest ever nine-monthly sales volume, net sales and net profit reported by them.

Exports for the quarter stood at 71,000 units, which is also the highest ever in a quarter. "The company continues to be the largest exporter of passenger vehicles in India," it said in its investor presentation.

"More or less the numbers have been inline with our expectations," said Ashwin Patil of LKP Securities. "Going forward, I believe that the concern starts from Q4 when the raw material prices have started increasing, and the tailwinds of Q3, will be almost gone in Q4. So, the numbers or the full year numbers need to be seen," he added.

"I don't think margin pressure should come at these levels," said Himanshu Singh of Prabhudas Lilladher, adding that this may be because of the recent price hikes of nearly 2.5% that the company has taken. "The increase in commodity prices is also not very substantial. So I don't think there will be any margin pressures going ahead from these levels, at least on my view," he added.

Shares of Maruti Suzuki India are currently trading 2.2% higher at ₹10,175.