Maruti Suzuki India Ltd. share price target

We maintain our BUY rating on the stock and revise our TP upwards to Rs 9,800 (from Rs 8,500 earlier) and value the stock at 27x its FY24E EPS. TP implies an upside of 14% from CMP.

from 14.06% to 14.03%. Preoperation capitalised expenses rose from 0.10% to 0.12%. Other income fell 67.01% to Rs 327.9 crore. PBIDT fell 41.33% to Rs 1890.1 crore. Provision for interest fell 12.76% to Rs 25.3 crore. PBDT fell 41.59% to Rs 1864.8 crore. Provision for...

Maruti Suzuki India Limited (MSIL) is an automobile manufacturer with a 56.2% ownership in Japanese car and motorcycle manufacturer Suzuki Motor Corporation. It is one of the largest passenger car companies and...

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rose from 23.74% to 31.43%. Employee cost increased from 4.38% to 4.69%. Other expenses 55.76% decline in operating profit to Rs 856.70 crore. Raw material cost as a % of total sales rose from 15.09% to 15.20%. Pre-operation capitalised expenses rose from 0.12% to 0.31%. Other income fell 14.64% to Rs 505.6 crore. PBIDT fell 46.13% to Rs 1362.3 crore. Provision...

During Q2FY22, MSIL's profit declined by 65.3% YoY to Rs4.8bn (below our estimates Rs7.8bn). Sharp decline in profitability was attributed to lower EBITDA margins which declined by 615bps YoY to 4.2% (below our estimates of 5.5%) and lower other income which declined by 13.2% YoY. MSIL could not produce ~116,000 vehicles during the quarter due to electronics component shortage. Without semiconductor chip shortages, MSIL's volume growth would have been 26% in Q2FY22 vs -3% currently. The Company has more than 200,000 pending customer orders at the end of Q2FY22. We believe the Company falls in the category of Great Company in Temporary Trouble and remain...

Lowest ever EBITDA margins at 4.2%; 250bps impact from high RM costs. Maruti's 2QFY22 EBITDAM disappointed at 4.2%, led by soaring raw material costs (250bps impact) and low production levels (116k units) regardless of three price hikes over 1HFY22 (~1.9% in Sep-21). Despite strong demand, orders remained unfulffilled due to production cut of 60%/40% in Sep-21/Oct21. Further, 2Q market share declined to 43% vs 48% of FY21 due to new product launches from competitors and rising demand in SUV segment....

We upgrade our rating from HOLD to BUY and revise our TP upwards to Rs 8,500 (from Rs 7,500 earlier) and value the stock at 25x its FY24E EPS, implying an upside of 16% from CMP.

Great Company in Temporary Trouble: Over the last 12 months, MSIL has faced barrage of bad news including Covid -19 lockdown, unprecedented rise in Commodity prices, Bumper to Bumper Insurance and Semiconductor Chip shortages etc. We anticipate majority of these events are temporary in nature and may not last beyond...