Revenue/ebidta/pat grew 13%/6%/24% YoY in 3QFY21 to ~Rs234.5 billion/Rs22.3 billion/Rs19.4 billion. The same in 9MFY21 fell 19.3%/43%/30%. Net sales grew 13.3% to Rs234.6 billion, with net realisations flat YoY (-0.8% QoQ) at Rs473k (v/s our estimate of Rs475.6k) due to higher discounts and adverse mix. Discounts increased QoQ to Rs20.1k/unit (v/s Rs 17.3k/ Rs 33k in 2QFY21/3QFY20). Gross margin declined 250bp QoQ (-160bp YoY) impacted by RM cost inflation (+3pp QoQ), poor mix, and higher discounts (+70bp QoQ). Ebitda margin fell 70bp YoY (-80bp QoQ) to 9.5% (v/s our estimate of 11.3%) due to weaker gross margin and higher staff cost. Ebit margin rose 30bp YoY (+10bp QoQ) to 6.3% (v/s our expectation of 8%) due to lower depreciation. Higher other income boosted PAT growth by 24% to Rs19.4billion (v/s our estimate of Rs20.3billion.
Post festive demand, better than expected and contrary to its expectation demand didn’t decline. Fresh bookings have also been positive. Current order backlog stands at 215k vehicles, with low dealer inventory at 21k units at the beginning of January 2021. Currently, there is no impact on part supplies. However, the management is monitoring the situation closely as some OEMs are impacted. Replacement demand (at 19% of sales v/s 26% last year) is yet to see an improvement. Rural markets (over 40% of volumes) and CNG (+18% YoY in 9MFY21) have done much better. Capacity utilisation is near ~100%. 3QFY21 has already seen good operating leverage benefits. As it adds capacity, MSIL would have a negative impact in the interim. It expects marketing cost to increase from the lows of FY21.
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