Maruti Suzuki India Ltd. share price target

aided by higher other income and lower tax: Maruti Suzuki India Limited's (MSIL) Q4FY2019 results are weaker than our as well as consensus estimates on the operating front as the company posted lower-than-expected margins. The top line at Rs. 21,459 crore was almost flat (up 1.4% y-o-y for the quarter) primarily driven by a 1% increase in realisation on account of price hikes taken by...

Market leadership maintained, foremost in BS-VI model launch FY19 was a difficult year for the domestic automobile space with growth challenging, particularly in H2FY19. Demand sentiments were soured by a concurrent increase in fuel, insurance as well as finance costs during the seasonally important Dussehra-Diwali period. For FY19, total domestic sales growth in the automobile space were at 5.2% YoY wherein PV volumes were at 33.8 lakh units, up 2.7% YoY. MSIL in FY19 clocked domestic volumes of 17.3 lakh units, up 5.3% YoY and maintained its market leadership, ending...

MSIL witnessed a -0.7% growth in volumes in Q4 and 5.5% growth in FY 2019. This has been a result of several macro headwinds such as rising fuel prices and interest rates, dampening sentiments, intensifying competition and subdued urban demand. Exports business also saw a negative growth...

Maruti Suzuki's (MSIL) Q4FY19 revenue grew a muted 1.4% YoY to Rs 214.6bn. EBITDA fell 25% YoY to Rs 22.6bn and adj. PAT declined 13% to Rs 17.9bn. Despite a subdued near-term PV outlook, We expect MSIL to maintain its above-industry performance. Benefits of operating leverage at the Gujarat plant, normalised inventory and lower discounts can help margins recover from H2FY19 lows. We pare FY20/FY21 EPS estimates by 3.7%/2.3% to build in...

25 April 2019 Revenues grew 1.4% YoY to INR214.6b (v/s est. of INR207.5b), led by 2.1% increase in realizations to INR468.1k (v/s est. of INR452.6k); but, volumes declined 0.7%. EBITDA margins at 10.5% (v/s est. of 12.1%, +70bp QoQ, -370bp YoY) were impacted by (a) inventory de-stocking, (b) fixed cost/depreciation at Gujarats new line & engine plant, (c) forex, and (d) conversion cost inflation. These headwinds were more than offset by lower discounts, price increases and lower staff costs.

EBITDA margin expanded 70bps qoq to 10.5%, below our estimate of 13%, as the benefits of price increases, discounts, and scale were mostly offset by higher costs in the Gujarat plant, inventory adjustments, and adverse forex movement. Despite the increase in competitive intensity, management expects to outpace industry...

At the Fag-End of Weak Business Cycle -Maintain BUY: During Q4FY19, MSIL sales grew by 1.4% YoY to Rs214.6bn (below ourestimates Rs235 bn). Its EBITDA margins declined by 370bps to 10.5% (belowour estimates of 12.5%).

Our channel checks indicate near-term demand concerns due to tight liquidity conditions for business community and increasing vehicle prices. The volume performance is expected to gradually improve after elections, and single-digit growth likely in FY20. Dealer inventory days have increased to 45-50 days, in comparison with normal levels of 20-30 days, and is expected to reduce in the coming months due to lower offtake from OEMs and sequential demand improvement due to the marriage/festive season. However, MSIL is expected to sustain market share over next 1-2 years due to new products, network expansion, and shifting customer preferences toward petrol vehicles....

We set a revised PT of Rs.7,350 based on 22x PE (on FY21 EPS). The Toyota Suzuki - Maruti relationship has moved a step further with the two Japanese OEMs announcing joint development initiatives both in India and for global markets. We expect the synergies from this relationship to be visible over the medium term. While Maruti will gain access to hybrid technology, which will ensure their continued market dominance, they will now be sharing one fourth of their portfolio by volumes with Toyota. We re-iterate our BUY on Maruti as we believe that it is well positioned to benefit from the transition post the introduction of BSVI in Apr20.

ICICI Securities Ltd | Retail Equity Research The demand situation in the domestic auto space has got aggravated post the recent muted festive season (Dussehra, Diwali 2018) with inventory levels in the system showing no signs of abatement. Consumer sentiment is muted primarily tracking higher penetration of connected mobility (ride sharing), higher insurance costs incidence, etc. As per recent FADA release, total passenger vehicles retail sales domestically are down 8.25% YoY in February 2019 with inventory in this segment at 50-60 days vs. the...