SML Isuzu Ltd. share price target

SML Isuzu reported a dismal performance in Q1FY20. Revenue stood at Rs 287mn (-94% YoY) attributed to sharp 95% fall in volume (202 units) offset by increase in net ASP because of better spare parts revenue. Bus to Truck volume mix was in ratio of 44:56 with market share of 7.8% in the bus segment. EBITDA loss stood at Rs 357mn attributable to high RM costs and negative operating leverage. The company reported net loss of Rs...

We continue to maintain negative view as FY21 could be tough year as challenges persist in the form of regulatory changes (cost rise due to the move from BS-IV to BS-VI) and negative economic impact of Covid19. As schools and colleges remain shut, we do not see any revival in demand in the bus segment in FY21. The increasing penetration of EVs...

SML Isuzu (SML) reported weak set of numbers in Q2FY19, which were lower than our estimates. While net revenue grew by 30.1% YoY led by volume growth of 27.7% YoY, the loss widened on a YoY basis to Rs. 7.7 cr on account of weak operational performance and higher depreciation. The operating margins declined by 151bps YoY to 0.5% due to higher raw material cost and other expense. Despite headwinds in the near term, with depreciating currency and increased cost pressures.

We value the stock at Rs 904 (17x Sept-20E EPS) vs 988 earlier. Maintain BUY SML Isuzu delivered subdued performance in 2Q. Revenue stood at Rs 2.9bn (+30% YoY) led by 28% increase in volume (2.88k units) and 2% in increase in net ASP. Bus: Cargo mixes were at 56:44. EBITDA stood at Rs 14mn with margin 0.5% impacted by commodity inflation and absence of any price hike. The company reported net loss of Rs 77mn (vs est loss of Rs 28mn) led by higher depreciation and interest cost owing to capacity addition.

SML Isuzu is mainly concentrated in 5 to 12 tonnes GVW segment. In Buses segment, it focuses on school buses, State transport buses, luxury buses and buses for employees in BPOs, etc. SML Isuzu also exports vehicles to Sri Lanka, Bangladesh, Nepal, and...

We value the stock at Rs 1023 (18x FY20E EPS). Maintain BUY Driven by a strong recovery in school buses volume, SML Isuzu printed impressive numbers in 1QFY19. Although EBITDA number missed estimates (owing to higher RM cost), rose by 116% YoY at Rs 396mn with improved 8.7% margin (+300bps YoY/216bps QoQ). Revenue stood at 4.5bn (+42% YoY) led by 32% increase in volume (4.15k units) and 7% in increase in net ASP. Bus: cargo mix remains favorable at 75:25. APAT stood at Rs 201mn (198% YoY).

Post a dismal performance in 9MFY18, SML Isuzu (SML) reported healthy numbers for Q4FY18 which were marginally ahead of our estimates. Its revenue and PAT grew at 0.6% and 56.5% respectively.`

We value the stock at Rs 1023 (18x FY20E EPS). Maintain BUY After four quarters of earning decline SMILs finally back on track and posted net profit growth 55% at Rs 148mn in 4Q. EBITDA number missed estimates led by higher RM cost. EBITDA rose by 34% YoY at Rs 242mn with margin 6.6 %( +162bps YoY). Revenue stood at 3.7bn (+0.6% YoY, in line estimates). Total volumes fell by 7% YoY (3.69k) in 4Q, on higher base (pre buying before BSIV).

Maintain BUY with a TP of Rs 1225. SMLIs 3Q EBITDA at Rs. -18mn and revenue 2.2bn (-3% YoY) were below estimates owing to adverse product mix (Bus: Cargo mix was 35:65 in 3QFY18) and higher other expenses (+234bps QoQ, led by increase in R&D; and marketing expenses). Total Volumes fell by 13% YoY (2.30k) in 3Q, owing to slowdown in Bus segment and weak lower tonnage cargo demand. APAT turned negative at Rs -98mn dragged by negative operating leverage.

We value SMLI on 20x P/E on Sept-19E EPS. Maintain BUY with a TP of Rs 1225. SML Isuzu posted in-line revenue at Rs 2.27bn (-25% YoY) in 2Q. Volumes fell by 35% YoY (2.26k), owing to unsold BS3 inventory, insufficient supply of chassis frame components, shortage of BS4 components and a slowdown in Bus demand. EBITDA came in at Rs 45mn (-74% YoY), with margin at 2% (-338bps YoY), impacted by operating de-leverage and conversion cost (~Rs 8mn) of vehicles from BS3 to BS4.

Maintain BUY with a TP of Rs 1225. We hosted the management of SML Isuzu (SMLI) for a series of investor meetings. We believe that SMLIs growth ahead will be based on (1) Strong brand equity in the school bus segment and debottlenecking of capacity in the peak season, (2) increase in capacity utilisation led by expanding presence in the cargo segment, (3) Technology support from Isuzu Motors (which owns 15% stake in the company), (4) Expanding the product and distribution network, (5) Improvement in margins led by operating leverage.

Maintain BUY with TP of Rs 1,325 (20x FY19E EPS). SML Isuzu posted in-line revenue in 1Q at Rs 3.1bn (31% YoY). Volumes fell by 36% YoY owing to de-stocking at the dealer level pre GST implementation, weak replacement demand and subdued freight rates. EBITDA came in at Rs 183mn (-71% YoY), with margin at 5.7% (-770bps YoY), impacted by operating de-leverage and one-time conversion cost (~Rs 50mn) of vehicles from BS3 to BS4. Although FY18 numbers are expected to be subdued owing to hit in earnings in 1Q (peak season for school buses), we believe the company is well-placed to reap the rising demand of the passenger carrier segment.

SML Isuzu reported in-line Q4FY17 revenue growth; however Net profit took a hit due to BSIV implementation from April 1, 2017. Net revenue increased 16.2%, whereas EBITDA and PAT declined 30.8% and 46.9% respectively on YoY basis led by one time BS III write off.

SMLs 4Q APAT stood at Rs. 156mn (-7% YoY), slightly below expectations. The top-line at Rs 3.7bn ( 16%) was aided by 16% volume growth. EBITDA margin contracted 360bps YoY to 5.3% owing to higher RM cost ( 320bps YoY). In 4Q, the company wrote off Rs 101mn (including a margin loss on sales returns and freight costs etc), which added to RM costs. Excluding this one-off, EBITDA margin stands at 8% vs exp. of 8.5%.

BS-III Ban Results in Volume Push During Q4FY17: SML ISUZU Ltd (SML) recorded 15184 vehicles during FY17 which is 19.6% higher than that of FY16 where it was 12700 vehicles. Clearly, major push was attributed by the BS-III ban on vehicles which led volumes for Q4FY17 to grow at 61.7%/21.0% QoQ/YoY clocking 4241 vehicles.

SML Isuzu reported in-line Q3FY17 numbers, wherein Net sales increased by 18.3% to Rs. 228.1 Cr and Net profit stood at Rs. 3.1 Cr compared to Net loss of Rs. 0.9 Cr in Q3FY16. The total volume for the quarter stood at 2,623 units, up 12% on YoY basis.

Although moderately below our expectations, SML reported strong numbers in 3QFY17. The top-line stood at Rs 2.3bn ( 18%), aided by 12% volume growth and 5% increase in net ASP. The EBITDA margin stood at 4% ( 264bps YoY), driven by an improvement in the product mix (cargo: bus mix 64:36 vs 67:33 in 3QFY16)

BUY SML Isuzu Ltd CMP at Rs. 1202 and add on Dips Rs. 1120 - 1070 for the targets of Rs. 1432

SML Isuzu is mainly concentrated in 5 to 12 tonnes GVW segment. In Buses segment, it focuses on school buses, State transport buses, luxury buses and buses for employees in BPOs, etc. SML Isuzu also exports vehicles to Sri Lanka, Bangladesh, Nepal, and...

Weak Quarter Due to Seasonality, Still Maintains Growth: SML posted revenue of Rs. 3046Mn in Q2FY17 down by 34.2% QoQ and up by13.3 % YoY driven by volume movement of (30.0%) QoQ/12.7% YoY and realization de-growth of 6.1% QoQ and +0.6% YoY. EBITDA margins declined by 730bps QoQ to 5.2% during Q2FY17 from 12.5% during Q1FY17 impacted by revenues andfixed costs effect, while raw material costs remained flattish as compared to the previous quarter.