Maruti Suzuki geared up for a record show


is cruising towards recording its highest ever revenue and profit in the ongoing fiscal year, led by strong demand for its cars and benefits arising from the depreciation of the Japanese yen and sober raw material costs.

The most significant boost will come from the currency benefit, which may add more than ₹1,500 crore to its operating profit this fiscal year, as per an ETIG analysis, if the currency exchange rates remain at the current levels.

Analysts tracked by Bloomberg on average expect the Indian unit of Japan’s Suzuki Motor to report an operating profit (Ebitda) of about ₹10,000 crore and a net profit of ₹7,228 crore in fiscal year 2023. Revenue is forecast to be about ₹1 lakh crore, up 28% from last year, which would be driven by an expected output of more than 2 million vehicles.

According to ETIG analysis, the yen has depreciated 16% against the US dollar since 2022, while the rupee fell 5% in the since period. So effectively, the rupee has appreciated about 11% to the yen. Essentially, Maruti Suzuki will have to pay less in the Japanese currency for payments denominated in yen – which is 16-17% of the total raw material cost. A 10% appreciation to the rupee against the yen would result in an operating profit boost of ₹1,000 crore for Maruti Suzuki. A 10% weakening in the yen against the rupee translates into a margin expansion of 160-170 basis points, with 16-17% of the raw material cost in the Japanese currency. Adjusted for export earnings, the net addition to the operating margin would be 90-120 basis points.

An email sent to Maruti Suzuki did not elicit any response till press time on Sunday.

Yen slipped to its lowest in nearly 25 years against the dollar on Friday. The yen has been the worst performing currency in Asia region in the last three months With Bank of Japan’s intent to continue yield curve control, the divergence of the yen with its global peers is likely to sustain. This would mean Maruti’s operation margins could be 80-100 basis points higher than the consensus forecast for the year.

The projected operating profit margin for Maruti Suzuki is 9.2% and 11% for FY23 and FY24, respectively, according to Bloomberg estimates.



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