Although the auto industry experienced significant tailwinds in the three months ending in December (Q3), India's largest domestic passenger vehicle maker, Maruti Suzuki, may experience a sequential upside in its net profit and revenue due to a decent sales volume, price hike in vehical segment by 1.1%. Today(Tuesday, January 24th) the company is expected to release its Q3 FY23 results today.

"Some of the most notable events that happened in Q3 FY23 were the sustained reduction in commodity prices, the robust order book across passenger vehicle (PV) OEMs, the strong festively led retails across segments, and the inventory de-stocking in light of the calendar year shift. Even still, Maruti Suzuki's overall volumes were only 4.7 lakh units, a drop of 10% from the previous quarter (QoQ). Therefore, despite a hike in ASPs of 5% sequentially to Rs 5.8 lakh per unit and a decrease in volumes of 5% QoQ, an anticipated net sales of Rs 28,281 crore for the quarter" - An earnings report from ICICI Securities stated.

Analysts have speculated that a more diverse product offering could help offset the sales decrease and model discounts (a higher share of SUVs in the sales mix). Overall, market anticipate revenues of between Rs 26,482.5 crore and Rs 28,281 crore. The revenues in Q3FY22 were Rs 23,246 crore, while in Q2FY23, they were Rs 29,931 crore.

The higher share of utility cars in total volumes (24% vs. 19% in Q2FY23) may further help EBITDA and EBITDA margin. Interest, taxes, depreciation, and amortization are all subtracted from a company's profits to arrive at EBITA. "As a result of a stronger product mix and price increases, the market anticipate a 10% YoY rise in realization (a 3% increase QoQ). Growing margins year-over-year and quarter-over-quarter are possible thanks to higher volumes, higher prices, and a more favorable exchange rate, "said Reliance Securities.