Shares of Maruti Suzuki India Ltd dropped by 2% to ₹11,252.45 on the NSE as the company prepared to release its Q2 FY25 results today. Analysts anticipate muted performance, with revenue expected to stay flat year-on-year and net profit projected to fall up to 5%, largely due to a decline in volumes.
Key Factors Affecting Maruti Suzuki’s Q2 Performance:
- Volume Decline: Total domestic volumes declined 7% YoY, primarily affected by reduced demand for entry-level cars and higher discounting.
- SUV Segment Gains: Analysts expect Maruti’s increased focus on utility vehicles (SUVs) to partly offset the decline, with a stronger product mix anticipated to boost margins.
- Expanding Portfolio: Maruti is gearing up to launch its first electric vehicle (EV) in FY25, which could diversify its offerings across various powertrains.
Industry-Wide Challenges:
- Decline in Passenger Vehicle Sales: The PV segment reported a 10% MoM and an 18.81% YoY sales drop, driven by seasonal effects, heavy rains, and a sluggish economy.
- High Inventory Levels: Dealerships are facing an extended inventory period, stretching to 80-85 days, with stock worth approximately ₹79,000 crore, as per FADA data.
The market remains cautious ahead of Maruti’s Q2 results, as investors monitor how the company’s SUV growth strategy and future EV plans could influence its performance amid broader automotive sector challenges.
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