Maruti Suzuki India Ltd. share price target

MSIL reported 3QFY17 results, which were in line with our and consensus estimates. Reported 3Q PAT of Rs17.9bn was lower than our and street expectation due to lower other income (Rs2.4bn). Other income declined due to sudden increase in the G-Sec bond rates. Overall, results were broadly in line with our expectations at the operating level. Increased share of new models, cost reduction efforts, lower sales promotion and marketing expenses helped to increase the profits however it was partially offset by adverse commodity prices and lower other income during the quarter....

ICICI Securities Ltd | Retail Equity Research Maruti Suzuki (MSIL) reported its Q3FY18 numbers, which were in line with our estimates on the topline & operational front. Net revenues at | 19283 crore, up 14.3% YoY, down 11.4% QoQ were line with our estimate of | 19281 crore. Topline growth was driven by 11.3% YoY volume growth & 2.3% YoY ASP growth. ASPs came in at | 439329/vehicle against our estimate of | 438476/vehicle Volumes for Q3FY18 were at 431112 units, up 11.3% YoY. Of this,...

During Q3FY19, Maruti Suzuki India Ltd (MSIL) net sales grew 14.3% YoY to Rs192.8b, driven by 11.3% volume growth and a 2.6% increase in average realizations. EBITDA margins expanded by 100bps YoY to 15.8% on account of cost-reduction initiatives partially offset commodity cost inflation.

On a like to like basis (Adjusted for excise duty), for the quarter ended December 2017, Maruti Suzuki registered 14% rise in sales to Rs 19283.20 crore. OPM grew 110 basis points to 15.8% which saw OP rise 22% to Rs 3037.80 crore, on account of higher sales volume, cost reduction...

Net sales grew 14.2% YoY to INR192.8b (in-line), driven by 11.3% growth in volumes and a 2.6% increase in realizations to INR447k (est. of INR446.8k). EBITDA margin of 15.8% (est. of 15.4%) expanded 110bp YoY (-110bp QoQ), as cost-reduction initiatives partially offset commodity cost inflation. EBIT margin expanded 120bp YoY (-160bp QoQ) to 12.2% (est. of 11.8%). Lower other income and a higher tax rate restricted PAT growth to 3% YoY to ~INR17.9b (est. of INR20.3b). We have cut FY18/19E EPS by 3.8%/2.7% as we lower other income and increase the tax rate. The stock trades at 25.1x/19.7x FY19E/20E EPS. Maintain Buy with a TP of INR10,972 (~25x Mar-20 core EPS + ~INR1,592cash/share)

Industry: Auto and Auto Components | Industry View: Positive Results on track, PAT impacted due to lower other income Margins resilient despite rise in input costs in Q3 Maruti Suzuki India Ltd (MSIL)'s Q3 FY18 numbers came in line with our expectations at topline, while at operating levels it came slightly above our estimates. The top-line grew by 14.3% yoy and fell by 11% qoq. Volumes in the quarter were at a record 4.27 lakh units, growing by 10.5% yoy and fell by 13% qoq, while realizations growth was at 1.6% qoq. The new launch bouquet of Baleno, Brezza and Dzire were the star performers in the quarter. Although there...

MSIL's market share in FY18 (April-Dec) has increased to 50.3% (up from 47.4% in FY17). Despite higher base, strong product portfolio and robust after sales network has helped the company grow its volumes at a healthy rate. We expect MSIL's volumes to grow by 12% over FY17-FY20E driven by current portfolio and new products. MSIL's EBITDA margin is expected to improve gradually over the coming years. Operational leverage from high capacity utilization at Gujarat plant and cost reduction measures is expected to translate into EBITDA margin expansion over FY18-FY20. We introduce FY20E earnings and roll over our target price to...

However, we change our rating from BUY to NEUTRAL, owing to the constraint of rich valuations (26/22x for FY19/20E EPS, 30% premium over its 3-year historical multiple). We continue to like MSILs unique moats, although valuation leaves little room for an upside. It is trading at an all-time high (26x FY19e and 22x FY20e EPS), which seems expensive. Additionally, earnings are unlikely to be revised upwards, owing to a limited upside to volumes (constraint of 10-12% CAGR owing to capacity), and limited triggers for a margin surprise (current expectations are 180bps expansion in two years).

owing to lower other income and higher tax outgo: Maruti Suzuki India Ltd (MSIL) reported a strong operating performance in Q2FY2018 as operating margins significantly exceeded ours as well as consensus estimates. Topline rose 22% y-o-y to Rs 21,768 crore, driven by an 18% y-o-y rise in sales volumes as recent model launches witnessed robust demand....

Q2FY18 was ~15% operational beat backed by benign commodity contracts, lower discounts and operating leverage. EBITDA margin at 16.9% was ~150 bps beat. However, we expect the margin to cool off slightly with input cost pressures coming up next quarter onwards.