Maruti Suzuki India Ltd. (MSIL) reported a strong set of results for the first quarter of fiscal year 2024 (Q1 FY24). The company's net profit jumped 145% to Rs 2,485 crore, while there was an increase of approximately 22% to Rs 30,845 crore in revenue from operations.

Maruti’s over two-fold jump in net profit was supported by a range of factors, including new launches, higher sales volume, improved realization, cost reduction efforts and higher non-operating income.

The country’s biggest carmaker sold 434,812 units, a year-on-year growth of 9.1%, in the domestic market in the previous quarter, while its exports stood at 63,218 units, compared to 69,437 units in the year-ago quarter.

Worth mentioning here is that due to a shortage of electronics components, the company could not produce over 28,000 vehicles. At the end of Q1FY24, pending customer orders stood at about 3.55 lakh vehicles. The company said it is making efforts to process these orders faster.

Continued demand for existing models, launch of CNG version of existing models like Baleno and XL6 , and recently launched models such as Grand Vitara and Fronx helped boost the company’s sale volume in the previous quarter.Here are some of the other factors that drove Maruti’s profit in Q1:

Improved realization: MSIL's average selling price (ASP) increased by 14.6% in Q1 FY24. This was due to a combination of factors, including the increase in fuel prices and the company's decision to pass on some of the cost increases to customers.
Cost reduction: MSIL also took a number of steps to reduce costs in Q1 FY24. These included the rationalization of production and the optimization of material costs.

As a result of these factors, MSIL's EBITDA margin increased to 9.23% in Q1 FY24, from 7.2% in the same quarter last year.

Looking ahead, MSIL expects the demand for passenger vehicles to remain strong in the coming quarters. The company is also planning to launch a range of products in near future, which should help boost its sales volume further.

Overall, the Q1 FY24 results were very encouraging for MSIL. The company is currently in a good state to pull forward its growth pace in the coming quarters.

Maruti Suzuki India Share Price Performance

Shares of India's biggest carmaker closed 1.14% lower at Rs 9,543.70 apiece on Thursday (3 August 2023). On a year-to-date (YTD) basis, the stock has advanced 13.40%, and in the last three months, the stock has appreciated by 8.17%.

As per Refinitiv, the consensus mean price target on Maruti is Rs 10,620.95, which indicates a potential upside of 11.28% over its previous closing price. Out of the 42 brokers (analysts) currently covering the stock, 17 have a Strong Buy rating on the stock, while 13 have a Buy recommendation. Seven analysts maintain Hold, while two and three analysts maintain Sell and Strong Sell ratings on the stock, respectively.