Maruti Suzuki’s (MSIL) 1QFY17 top-line at Rs 149bn (+12% YoY) met estimates, driven by net ASP improvement to Rs 431k. Gross margins slipped 100bps YoY owing to adverse forex impact. EBITDA margin contraction (-195bps YoY) to 14.8% was impacted by negative operating leverage. APAT came in stronger at Rs 14.9bn (+23% YoY, +1% QoQ) led by higher other income and lower depreciation (change in accounting method). With flat 1Q rural sales, the management now has its hoped pinned on a normal monsoon. Further impetus from the 7th Pay Commission could drive MSIL’s volume growth (12% CAGR over FY16-18E vs. 5% over FY13-15). Also, the net Yen exposure has come down, with Yen-denominated Baleno exports improving, thus reducing volatility in profits. We revise earnings ~4-8% for FY17-18E to factor in higher other income (adoption of Ind AS).HDFC Securities Maintain BUY with a revised TP of Rs 4,912 based on 20x FY18E EPSTrendlyne has 26 reports on MARUTI updated in the last year from 8 brokers with an average target of Rs 4863.1. Brokers have a rating for MARUTI with 2 downgrades,7 price downgrades,1 upgrade,4 price upgrades in past 6 months and 11 price upgrades in past 1 Year.