Maruti vs TATA CONSUMER PRODUCTS Q1 FY25

Maruti Suzuki reported a strong Q1 FY25 with net sales of ₹33,875 crore (+9.8% YoY) and net profit of ₹3,650 crore (+46.9% YoY), driven by cost reduction, favorable commodity prices, and forex gains. Total volumes grew 4.8% YoY to 521,868 units, with exports up 11.6% to 70,560 units. CNG penetration reached a record 33% of domestic sales. Management noted muted domestic demand due to heat waves and elections but remains optimistic about festive season recovery. Capacity utilization is ~85%, and inventory stands at 37 days. Risks include potential commodity price increases and yen appreciation impacting margins. Guidance for export volumes of 300,000 units for FY25 remains intact.

Guidance read

Export volume target of 300,000 units for FY25: Management reiterated that 300,000 export units is achievable for the full year, with growth in Middle East and Latin America. CNG vehicle sales target of 600,000 units for FY25: Management guided for 600,000 CNG vehicle sales in FY25, with Q1 achieving slightly less than 150,000 units. Six EV models planned by 2031: Maruti plans to launch six electric vehicle models by 2031, with the first EV to be displayed at Auto Expo in January 2025. 28 models in portfolio by end of decade: The company aims to expand from 18 to 28 models by 2030-31, adding at least 10 new models.

Risk read

Key risks include Commodity price increases — CFO noted that commodity prices are dynamic and could reverse, impacting margins. Non-ferrous metals have already seen some increase.; Yen appreciation impacting forex tailwind — CFO acknowledged that yen has started appreciating, which could moderate the forex benefit seen in Q1.; Muted domestic demand and high discounts — Discounts rose 50% QoQ to ₹21,700 per vehicle due to heat wave and elections. Demand recovery depends on festive season.; CAFE-3 norms compliance uncertainty — Stringent CAFE-3 norms from April 2027 may require significant EV/ hybrid mix. Super credits and penalties are still under policy consideration..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Tata Consumer Products reported a mixed Q1 FY25. Consolidated revenue grew 16% to INR 4,352 crore, with organic growth of 10% and acquisitions adding 6%. EBITDA rose 23% to INR 671 crore, with margin expansion of 80 bps to 15.4%. India Beverages grew only 6% (1% organic) as intense summer hurt hot tea and out-of-home NourishCo volumes. India Foods continued strong momentum with 30% revenue growth (14% organic, 10% volume). International business grew 10% (8% constant currency) with EBIT up 46%. PAT fell 14% to INR 289 crore due to higher amortization (INR 55 crore) and interest costs from bridge financing. Management highlighted integration of Capital Foods and Organic India is on track, with combined gross margins of 48.4%. Growth businesses (including acquisitions) now form 29% of India portfolio. Key risk: sustained high tea and coffee prices could pressure margins if not passed through.

Guidance read

Growth businesses to reach 30% of India portfolio: Management reiterated commitment to grow the growth businesses (including acquisitions) from 20% to 30% of the India portfolio, with these businesses growing at 30% CAGR. Organic India integration to complete in 100 days: Management committed to completing the integration of Organic India within 100 days from the April 16 closure, and is on track. Capital Foods integration largely complete: Integration of Capital Foods, including channel inventory cleanup, is complete and run rate is trending as expected. Rights issue to repay bridge debt: The rights issue, expected to close on August 19, will be used to repay short-term bridge financing of INR 3,000 crore raised for acquisitions.

Risk read

Key risks include Sustained high tea and coffee prices — North Indian tea prices are up 15-20% and coffee prices (Robusta) up ~50% from two quarters ago, which could pressure margins if not passed through.; NourishCo underperformance due to heatwave and tactical missteps — NourishCo revenue grew only 7% due to intense summer impacting out-of-home consumption and delayed tactical pricing actions, raising concerns about the business's resilience.; Integration disruptions at Organic India — Organic India deal closed on April 16, and inventory consolidation took longer than expected, potentially impacting near-term revenue and margins.; Amortization and interest costs weighing on PAT — Quarterly amortization of INR 55 crore from acquisitions and higher interest costs from bridge financing are depressing reported PAT, with no near-term relief expected..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.