Maruti Set for Soft FY25 Close

A strong start to the fiscal year may give way to a slower Q4 as discounts and margin pressure weigh on earnings

- Ayaan Kartik

After starting FY25 on a strong note, Maruti Suzuki India Ltd is expected to enter a slow lane with mid-single-digit revenue growth and a decline in profitability amid high discounts and weak sales growth, when it declares earnings for the January-March quarter on Friday.

According to the average estimates by four brokerages, revenue growth is expected to be around 7%, while net profit may fall by around 4%. Brokerages remain divided in their estimates for India's largest car seller's profitability. Motilal Oswal predicts a nearly 10% fall in earnings, while Axis Securities pegs the fall in net profit at 0.8%.

Analysts expect pressure on margins due to high marketing expenses and discounts. "The Ebitda margin is expected to decline by 44 basis points year on year due to higher marketing and advertisement spending, higher discounts partly offset by operating leverage, and increased sales of CNG vehicles," Axis Securities analysts wrote in a 9 April note.