Analysts expect the earnings upgrade cycle for Maruti to continue in FY19 as well, driven by higher volumes and margins.
"Our FY19/20 consolidated earnings per share (EPS) is higher by 5% / 13% than the consensus, led by higher margins. The stock trades at 26x/20.1x FY19/20E consolidated EPS. Maintain 'buy' with a one-year target price of Rs 10,525. Over 3 years, we estimate total return of 15.3% CAGR with target price of Rs 14,213," says an analyst tracking the company with Motilal Oswal Research in a recent report.
Meanwhile, here's what leading brokerages expect from Maruti's Q4FY18 numbers due later on Friday.
BNP Paribas research
4QFY18E revenue to grow at 14.7% y-o-y supported by 11.6% y-o-y volume growth and higher realisations on a better mix. Strong realisation due to better product mix (Dzire and Baleno) and less discounting vs 4QFY17 which was impacted by demonetisation and Gujarat plant ramp-up costs.
Expect 135bp y-o-y EBITDA margin gain on higher volume, better mix and less discounting, partly pulled down by higher commodity costs. Watch out management commentary on retail demand; industry discounting; inventory; rural demand trends; Gujarat plant ramp up; EVs; collaborations; road-map for FY19 and ahead. Our 12-month DCF-based target price is Rs 10,600.
Kotak institutional equities
We expect revenues to increase by 14% y-o-y in 4QFY18 on the back of 12% y-o-y volume growth and 4% y-o-y increase in realizations due to a better product mix (higher Baleno and Brezza volumes). We expect EBITDA to increase by 27% y-o-y in 4QFY18 led by strong revenue growth and operating leverage benefits.
We expect revenue growth of 13% y-o-y driven by volume growth of 11.4% Y-o-y and favourable mix. We expect operating margins to remain flat sequentially at 15.8% as benefits of a favourable mix are offset by slightly lower volumes and Gujarat plant ramp up.
We expect revenues to grow by 13% y-o-y (+7% q-o-q) to Rs 206 billion, led by growth of +11% y-o-y (+7% q-o-q) in sales volumes. EBITDA margin is pegged at 15.5%, due to better scale and favourable product mix. Adjusted PAT (profit after tax) is likely to increased +22% y-o-y (+15% q-o-q) to Rs 20.7 billion.