Maruti Suzuki India Ltd. share price target

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.

such as the Swift and Swift Dzire (already launched), and the rest will be new models. Benign competition, wide distribution network, continuous demand from the cab aggregators, good monsoon leading to rural demand (~32%) and the positive impact of Seventh Pay Commission trickling in (government employees contributed 20% of volumes in Q2), we expect robust demand for MSIL to continue. With the Phase I of Gujarat plant having commissioned from Q4 FY17, it is expected to add 2.5 lakh units as exit capacity of FY18 which would cater to the additional pickup in demand and ease up with the waiting periods of the new launches. MSIL...

ICICI Securities Ltd | Retail Equity Research Maruti Suzuki (MSIL) reported its Q4FY17 numbers, which came in above our estimates on the operational & profitability front. Net revenues at | 21768 crore, up 22% YoY, 24.1% QoQ were below our estimate of | 21935 crore. The topline growth was driven by 17.6% YoY volume growth & 3.6% YoY ASP growth. The revenue miss is...

We increase our target multiple to 23xSept 19E EPS (vs 22x earlier) and upgrade TP 8,880 (earlier, 8520) Maintain BUY. Maruti Suzukis (MSIL) 2Q EBITDA at Rs 36.8bn (+21% YoY) and margin at 16.9% (est. of 15%) beat expectations on the back of better cost management, lower discounts and benefit from operating leverage. Net revenue at Rs. 217bn (+22% YoY) was driven by 18% growth in volumes and 4% increase in realisations. APAT at Rs. 24.8bn (+3.4% YoY), was impacted by lower other income (-36% YoY).

leverage. EBIT margin expanded 440bp QoQ (+30bp YoY) to 13.8% (est. of 11.9%). Lower other income and a higher tax rate restricted PAT growth to 3.3% YoY (+60% QoQ) to ~INR24.8b (est. of INR23.3b). Earnings call highlights: a) MSIL's festival season sales grew in double-digit. Inventory levels would be ~2 weeks by end-October 2017 (normal inventory of 3-4 weeks). b) Rural volumes have grown 21.5% in 1HFY18. c) Impact of commodity price inflation would reflect in 2HFY18. On a YoY basis, commodity prices are higher by 200bp (% of sales) in 2QFY18. d) With higher...

Maruti Suzuki's (MSIL) Q1FY18 EBITDA (adjusted for GST-led dealer compensation & promotions) at ~INR24.7bn (up 11.6% YoY) came 4% below estimate due to higher commodity costs.