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Maruti's expansion in EBITDA margin is likely to be aided by these price hikes, operating leverage benefits and a favourable product mix.
India's largest passenger car maker Maruti Suzuki India will report its March quarter results on Wednesday and the street is expecting a decent quarter from the company.
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A CNBC-TV18 poll expects the company's revenue growth to be in excess of 20 percent, while the bottomline may grow by as much as 50 percent from last year. EBITDA margin is likely to expand as well.
For the March quarter, Maruti's volumes grew by 5.4 percent from last year to 5.14 lakh units, aided by healthy festive demand, easing of supply chain constraints and launches of new models.
Revenue growth for the quarter will be aided by this volume growth and the price increases undertaken during the quarter. In February, the company had hiked the price of its compact urban car Ignis by up to Rs 27,000. It had also hiked prices of vehicles across models by around 1.1 percent in January this year.
These price hikes will likely aid a 16 percent year-on-year growth in realisations. The expansion in EBITDA margin is likely to be aided by these price hikes, operating leverage benefits and a favourable product mix.
Shashank Srivastava, Senior Executive Officer, Marketing and Sales at Maruti Suzuki, told CNBC-TV18 in February that rural sales could get impacted due to El Niño.
"We also see in the rural sales, there are some questions being raised now because of the El Niño factor, whereby we would see an impact on the kharif sowing. And that could also impact the rural demand. So overall, there are some positives and also negatives, but on the balance, our view is that it's still quite positive," he said.
Shares of Maruti Suzuki have been flat this year.
(Edited by : Hormaz Fatakia)
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