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ICIC
I S
ecurit
ies –
Retail E
quit
y R
esearch
Result
Update
October 25, 2019
CMP: | 7,396 Target: | 6,420 (-13%) Period: 12 months
months
Maruti Suzuki India (MARUTI)
REDUCE
Muted quarter; volume trough seemingly in sight…
Maruti Suzuki (MSIL) reported a muted Q2FY20 performance. Total
operating income was at | 16,985 crore, down 24.3% YoY (ASP at | 4.76
lakh/unit, up 2.4% QoQ). Q2FY20 volumes were at 3.4 lakh units, down
30.2% YoY. EBITDA margins at 9.5% (down 93 bps QoQ) were at a multi-
year low, impacted by negative operating leverage. Consequent PAT was at
| 1,359 crore (down 39.4% YoY), supported by higher other income and
adoption of lower corporate tax rate. MSIL’s working capital position
deteriorated significantly. It generated negative CFO in H1FY20.
FY20E a write-off, BS-VI transition more palatable for PV space
The PV segment has suffered heavily amid the overall auto space weakness
that has persisted since the 2018 festive period. Rise in ownership costs
(additional safety features, higher fuel prices), slowing consumption
demand and increasing preference for shared mobility in some pockets
posed volume challenges to players. YTDFY20 volume decline at MSIL was
at ~25% YoY, which includes a steep decline of 30% in Q2FY20. We believe
BS-VI transition would be relatively more palatable for the PV segment since
envisaged price hike is limited to <=5% of vehicle costs (passenger cars,
largely petrol driven) vs. ~10% price hike in other segments (2-W & CV). For
MSIL, while BS-VI versions of eight products have already been introduced
(Alto, Baleno, Wagon R, Swift, Dzire, Ertiga, XL6 & S-Presso), the customer
response to alternative fuel cars (petrol, CNG) vs. their erstwhile diesel
variants (S-cross & Brezza) will be the key monitorable. This shift will dictate
the volume trajectory at MSIL, going forward. Sensing the challenges at
MSIL, we build in 9.6% volume growth in FY21E vs. ~15% decline
expectation for whole of FY20E.
Little respite on margin front
MSIL’s margin trajectory has taken a sharp dive from 15%+ in FY16-18 to
12.8% in FY19 and then further to 10.5% in Q1FY20 and 9.5% in Q2FY20. A
steep fall in volumes and highly competitive pricing environment have
weighed heavily on margins. The recent global correction in commodity
prices, however, does provide some solace. Going forward, we build in
EBITDA margins of 10.7% in FY20E and 11.5% in FY21E.
Valuation & Outlook
Going forward, we expect sales and PAT to grow at a CAGR of 2.9% & 1.9%,
respectively, over FY19-21E. We believe BS-VI rollout would have a lower
cost impact on PV segment (especially petrol) and MSIL as the industry
bellwether would drive volume growth here. However, valuations remain
stretched compared to historical precedents for muted growth periods.
Thus, we retain our cautious stance with a REDUCE rating, valuing MSIL at
| 6,420 i.e. 25x P/E on FY21E EPS of | 258/share.
Key Financials FY17 FY18 FY19 FY20E FY21E CAGR (FY19-21E)
Net Sales 68,034.8 79,762.7 86,020.3 80,801.9 90,051.4 2.3%
EBITDA 10,353.0 12,061.5 10,999.3 8,659.7 10,373.8 -2.9%
EBITDA Margins (%) 15.2 15.1 12.8 10.7 11.5
Net Profit 7,337.7 7,721.8 7,500.6 6,424.6 7,790.2 1.9%
EPS (|) 242.9 255.6 248.3 212.7 257.9
P/E 30.4 28.9 29.8 34.8 28.7
RoNW (%) 20.3 18.5 16.3 12.9 14.3
RoCE (%) 20.3 21.1 16.3 9.4 11.5
Key Financial Summary
Source: ICICI Direct Research, Company
Particulars
Particular Amount
Market Capitalization | 223418.4 Crore
Total Debt | 149.6 Crore
Cash & Investment | 35226.7 Crore
EV | 188341.3 Crore
52 week H/L (|) 7929 / 5447
Equity capital | 151 Crore
Face value | 5
Key Highlights
Volumes in Q2FY20 dropped 30%
YoY to ~3.4 lakh units. Revenue
decline at 24% YoY to | 16,985
crore lagged volume drop as ASPs
improved on better mix (higher UV
share) and BS-VI related price rise
Margins at 9.5% slipped 93 bps
QoQ amid negative operating
leverage
Going forward, pace of volume
decline is seen slowing as BS-VI
changeover approaches, with
margins improving gradually
towards ~12% by FY21E
Assign REDUCE rating with revised
target price of | 6,420
Research Analyst
Shashank Kanodia, CFA
shashank.kanodia@icicisecurities.com
Jaimin Desai
jaimin.desai@icicisecurities.com
ICICI Securities | Retail Research 2
ICICI Direct Research Result Update | Maruti Suzuki India
Exhibit 1: Variance analysis
Q2FY20 Q2FY20E Q2FY19 YoY (Chg %) Q1FY20 QoQ (Chg %) Comments
Total Operating Income 16,985 16,944 22,433 -24.3 19,720 -13.9 Topline as well as ASPs in line with our estimates
Raw Material Expenses 12,099 11,901 15,285 -20.8 14,091 -14.1
Employee Expenses 838 807 792 5.9 859 -2.4
Other expenses 2,441 2,550 2,925 -16.5 2,722 -10.3
Operating Profit (EBITDA) 1,606 1,687 3,431 -53.2 2,048 -21.6
EBITDA Margin (%) 9.5 10.0 15.3 -584 bps 10.4 -93 bps
Margins came in lower than estimates primarily on
account of negative operating leverage, as both -
employee costs and other expenses, were higher than
anticipated on percentage of sales basis
Other Income 920 650 527 74.7 836 10.0Other income higher than estimates, continuing a recent
trend in this regard
Depreciation 926 739 721 28.4 919 0.8
Depreciation expenses were higher-than-expected given
enhanced depreciation rates adopted on accelerated run
down of diesel powertrain plant & machinery
Interest 28 5 26 9.7 55 -48.4Interest expenses were higher on account of AS-116
accounting
Total Tax 213.4 400.1 970.6 -78.0 475.4 -55.1Tax rate for the quarter was at a mere 13.6% as MSIL
adopted new corporate tax rate benefit
PAT 1,359 1,166 2,240 -39.4 1,436 -5.4Beat on profitability front on account of higher other
income and lower tax outgo than expected
EPS 45.0 38.6 74.2 -39.4 47.5 -5.4
Key Metrics
ASP (|) 476,488 476,991 444,508 7.2 465,362 2.4
ASPs were higher on a QoQ basis due to betterment in
mix (higher UV share), cost control measures and pricing
action necessitated by introduction of BS-VI models and
safety features
Discounts (|) 25,761 20,000 18,750 37.4 16,941 52.1
Discounts came in far higher than anticipated, symbolising
extent of competitive intensity in the marketplace
Source: Company, ICICI Direct Research
Exhibit 2: Change in estimates
FY21E
(| Crore) Old New % Change Old New % Change Comments
Total Operating
Income
88,428 80,802 -8.6 95,073 90,051 -5.3
Revise our revenue estimates downward on the back of
further volume weakness experienced in Q2FY20. We build in
~15% volume decline for FY20E and, thereafter, foresee a
~9.6% rise for FY21E
EBITDA 9,835 8,660 -12.0 11,202 10,374 -7.4
EBITDA Margin
(%)11.1 10.7 -40 bps 11.8 11.5 -26 bps
We slightly trim our margin estimates given elevated
discounting levels. However, softer commodity prices are
seen benefiting the company, going ahead
PAT 6,854 6,425 -6.3 7,829 7,790 -0.5Lowering of sales and margin estimates leads to lowering of
PAT estimates
EPS (|) 227 213 -6.3 259 258 -0.5
FY20E
Source: Company, ICICI Direct Research
Exhibit 3: Assumptions
Comments
FY17 FY18 FY19 FY20E FY21E FY20E FY21E
Total Volumes (nos) 1,568,604 1,779,575 1,862,449 1,618,459 1,773,032 1,821,257 1,909,347 We factor in 2.4% volume decline CAGR over
FY19-21E
Average ASPs (|) 426,353 438,896 445,792 474,850 484,864 465,615 478,786
Betterment of product mix and further regulatory
led price increases are seen helping ASPs
RMC/Unit (|) 297,336 308,922 323,521 354,931 363,424 348,418 357,442
Discount (|) 16,774 15,895 18,334 22,116 15,000 16,610 16,250
We pare discount level estimates in FY21E as
the landscape is seen stabilising post BS-VI
implementation
Current Earlier
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 3
ICICI Direct Research Result Update | Maruti Suzuki India
Conference Call Highlights
Management guidance/outlook and demand
Retail volumes for MSIL declined ~22% YoY in Q2FY20. Retail demand
continues to pick up sequentially, with ~100,000 units per month in July
and August increasing to ~116,000 units in September and improving
further in October as well
Festive season demand is progressing well, with the Navratra period
recording flattish retail demand initially and then graduating to
moderately positive demand in later weeks. Positive momentum has
continued thereafter
MSIL reiterated its broad desire to not be present in the diesel segment
after implementation of BS-VI norms
Rural demand (down 18%) has declined slower than urban demand,
with rural sales forming ~39% of overall sales
Petrol segment accounts for ~67% of volumes at the industry level and
~77% for MSIL (up from ~72% YoY)
The company has nearly exhausted all BS-IV inventories of the eight
models where BS-VI variants have been introduced and production of
the older variants has also been curtailed
S-Presso has garnered 16,500 bookings thus far. The company has
delivered ~ 6,000 units till date
Sales, costs and margins
The company expects to realise greater commodity price related
benefits in H2FY20E
ASP improved during Q2FY20 on account of the company passing on
cost incidence related to safety features and BS-VI introduction
Discounting levels for the quarter were at | 25,761/unit vs. | 18,758/unit
in Q2FY19
Export sales for the quarter were at | 1,229 crore
Royalty expenses were at 5.2% of sales
Other
Channel inventory was at ~30 days of average monthly Q2FY20 retail
sales. Of this, BS-IV: BS-VI split was at 50:50 (including diesel)
MSIL guided for ~| 4,000 crore capex in FY20E
Financing levels were largely unchanged at ~80%
Gujarat plant volumes for Q2FY20 were at 82,251 units
Depreciation cost increased substantially during H1FY20 on account of
accelerated depreciation being provided on certain diesel heavy plant &
machinery
The company’s effective corporate tax rate, going forward, would be
~23%
ICICI Securities | Retail Research 4
ICICI Direct Research Result Update | Maruti Suzuki India
Financial story in charts
Exhibit 4: Topline and bottomline trends
43701
49874
57746
68035
79763
86020
80802
90051
2783
3711
4571
73387722
7501
6425
7790
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
(| crore)
(| crore)
Topline Bottomline
Source: Company, ICICI Direct Research
Exhibit 5: EBITDA and margin profile
6,605.9
8,978.6
10,353.0
12,061.5
10,999.3
8,659.7
10,373.8
13.2
15.5 15.2 15.1
12.8
10.7
11.5
-
2
4
6
8
10
12
14
16
18
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
FY15 FY16 FY17 FY18 FY19 FY20E FY21E
(%
)
(| crore)
EBITDA Margins (%)
Source: Company, ICICI Direct Research
Exhibit 6: Domestic vs. export volume trend
1051
1054
1171
1305
1445
1654
1754
1512
1664
120
101
122
124 124
126
109
107 109
0
200
400
600
800
1000
1200
1400
1600
1800
2000
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
('0
00s)
Domestic Exports
Source: Company, ICICI Direct Research
We expect sales to grow at a CAGR of 2.9% over
FY19-21E and build in -2.4% volume CAGR
Going forward, we expect the company to clock
EBITDA of | 10,374 crore in FY21E. We build in
EBITDA margin trajectory of 10.7% and 11.5% in
FY20E & FY21E, respectively
We expect domestic volumes to grow at a CAGR of
-2.6% over FY19-21E while export volumes are
expected to remain flattish in this time. Blended
volume CAGR is expected at -2.4% CAGR in FY19-
21E
ICICI Securities | Retail Research 5
ICICI Direct Research Result Update | Maruti Suzuki India
Exhibit 7: Domestic market PV share
47.2 47.3 47.4
50.5 50.4 50.3 50.0
52.5 52.1 51.7 51.2 51.049.8
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q2FY20
(%
)
Domestic Market Share
Source: Company, ICICI Direct Research
Exhibit 8: Annual discount trends and expectations
16951
19,529 18,898
16,774 15,895
18,334
22,116
15,000
0
5000
10000
15000
20000
25000
FY14 FY15 FY16 FY17E FY18 FY19 FY20E FY21E
(|)
Source: Company, ICICI Direct Research
MSIL has largely maintained its market leadership
with market share at FY19 end at 51.2%, up 120 bps
on a YoY basis. Market share as of Q2FY20 end was
at 49.8%
Discounts for Q2FY20 came in quite high at
| 25,761/unit vs. our expectation of | 20,000/unit
ICICI Securities | Retail Research 6
ICICI Direct Research Result Update | Maruti Suzuki India
Exhibit 9: Segment and model wise MSIL volumes
Segment, sub-segment
and model
Q2FY18 Q2FY19 YoY (%) Domestic market
share (%)
Passenger Cars 341,620 216,458 (36.6) 59.9
Mini 108,576 41,785 (61.5)
Alto 67,327 36,779 (45.4)
S-Presso - 5,006 NA
Wagon-R (old) 41,249 - NA
Compact 219,748 168,965 (23.1)
Wagon-R (new) - 38,221 NA
Swift 61,336 38,055 (38.0)
Celerio 26,087 13,710 (47.4)
Dzire 68,933 41,859 (39.3)
Baleno 54,304 32,969 (39.3)
Ignis 9,088 4,151 (54.3)
Mid Size 13,296 5,708 (57.1)
Ciaz 13,296 5,708 (57.1)
Utility Vehicles 64,115 55,222 (13.9) 25.6
XL6 - 6,196 NA
Ertiga 12,205 23,893 95.8
Gypsy 806 - (100.0)
S-Cross 9,227 2,360 (74.4)
Vitara Brezza 41,877 22,773 (45.6)
Vans 44,099 28,421 (35.6) 85.7
Omni 22,621 - (100.0)
Eeco 21,478 28,421 32.3
-
Passenger Vehicles 449,834 300,101 (33.3) 49.8
-
LCV 5,566 5,333 (4.2)
Total domestic 455,400 305,434 (32.9)
-
Total exports 29,448 25,798 (12.4)
-
Grand total 484,848 331,232 (31.7)
Source: SIAM, ICICI Direct Research; Domestic market share as of September 2019 on YTD basis
Within segments, MSIL’s UV portfolio de-grew to a
lower degree when compared to the bread and
butter passenger car segment. Shift in product mix
helped support ASPs for the quarter. Van portfolio
reported decline courtesy discontinuance of Omni
ICICI Securities | Retail Research 7
ICICI Direct Research Result Update | Maruti Suzuki India
Exhibit 10: Valuation
Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY17 68,035 55.7 243 163.7 30.4 19.0 20.3 20.3
FY18 79,763 17.2 256 5.2 28.9 15.7 18.5 21.1
FY19 86,020 7.8 248 (2.9) 29.8 17.1 16.3 16.3
FY20E 80,802 (6.1) 213 (14.3) 34.8 21.7 12.9 9.4
FY21E 90,051 11.4 258 21.3 28.7 17.6 14.3 11.5
Source: Company, ICICI Direct Research
Exhibit 11: MSIL currently trades at ~28.7x FY21E EPS of | 258
0
2000
4000
6000
8000
10000
12000
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
(|)
Price 39x 34x 29x 25x 20x 16x 11x
Source: Bloomberg, ICICI Direct Research
ICICI Securities | Retail Research 8
ICICI Direct Research Result Update | Maruti Suzuki India
Exhibit 12: Recommendation history vs. consensus
0.0
20.0
40.0
60.0
80.0
100.0
0
2,000
4,000
6,000
8,000
10,000
12,000
Oct-19Jul-19Apr-19Jan-19Oct-18Jul-18May-18Feb-18Nov-17Aug-17May-17Feb-17Nov-16
(%
)(|)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Reuters, ICICI Direct Research
Exhibit 13: Top 10 shareholders
Rank Name Latest Filing Date % O/S Position (m) Change (m)
1 Suzuki Motor Corp 30-Jun-19 56.2 169.8 0.0
2 Life Insurance Corporation of India 30-Jun-19 6.8 20.5 0.4
3 The Vanguard Group, Inc. 30-Sep-19 1.4 4.3 0.0
4 Capital Research Global Investors 30-Jun-19 1.1 3.3 2.3
5 GIC Private Limited 30-Jun-19 1.1 3.3 3.3
6 SBI Funds Management Pvt. Ltd. 30-Sep-19 1.0 3.2 -0.1
7 BlackRock Institutional Trust Company, N.A. 30-Sep-19 1.0 3.0 0.0
8 UTI Asset Management Co. Ltd. 30-Sep-19 0.8 2.3 0.1
9 ICICI Prudential Asset Management Co. Ltd. 30-Sep-19 0.7 2.2 0.1
10 Nomura Asset Management Co., Ltd. 31-May-19 0.7 2.2 0.0
Source: Reuters, ICICI Direct Research
Exhibit 14: Recent activity
Investor name Value ($ M) Shares(M) Investor name Value ($ M) Shares(M)
GIC Private Limited 311.8 3.3 Axis Asset Management Company Limited -116.4 -1.2
Capital Research Global Investors 216.3 2.3 DSP Investment Managers Pvt. Ltd. -25.1 -0.3
JPMorgan Asset Management U.K. Limited 82.3 1.0 Capital World Investors -22.9 -0.2
Life Insurance Corporation of India 33.8 0.4 Tata Asset Management Limited -22.6 -0.2
T. Rowe Price International (UK) Ltd. 25.7 0.3 Reliance Nippon Life Asset Management Limited -16.5 -0.2
Buys Sells
Source: Reuters, ICICI Direct Research
Exhibit 15: Shareholding pattern
(in %) Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
Promoter 56.2 56.2 56.2 56.2 56.2
FII 23.0 22.7 22.3 25.3 23.4
DII 16.0 13.4 13.4 11.3 15.0
Others 4.9 7.7 8.1 7.2 5.3
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 9
ICICI Direct Research Result Update | Maruti Suzuki India
Financial Summary
Exhibit 16: Profit and loss statement | crore
(Year-end March) FY18 FY19 FY20E FY21E
Total operating Income 79,763 86,020 80,802 90,051
Growth (%) 7.8 -6.1 11.4
Raw Material Expenses 54,975 60,254 57,444 64,436
Employee Expenses 2,834 3,255 3,478 3,636
Marketing Expenses 0 0 0 0
Administrative Expenses 0 0 0 0
Other expenses 9,892 11,512 11,221 11,606
Total Operating Expenditure 67,701 75,021 72,142 79,678
EBITDA 12061.5 10999.3 8659.7 10373.8
Growth (%) -9 -21 20
Depreciation 2,758 3,019 3,717 3,782
Interest 346 76 139 113
Other Income 2,046 2,561 3,394 3,638
PBT 11,003 10,466 8,198 10,117
Others 0 1 2 3
Total Tax 3,282 2,965 1,773 2,327
PAT 7721.8 7500.6 6424.6 7790.2
Growth (%) -3 -14 21
EPS (|) 255.6 248.3 212.7 257.9
Source: Company, ICICI Direct Research
Exhibit 17: Cash flow statement | crore
(Year-end March) FY18 FY19 FY20E FY21E
Profit after Tax 7,722 7,501 6,425 7,790
Add: Depreciation 2,758 3,019 3,717 3,782
(Inc)/dec in Current Assets -50 -504 -875 -670
Inc/(dec) in CL and Provisions 2,584 -1,331 -1,527 1,428
Others 346 76 139 113
CF from operating activities 13359.1 8760.5 7878.4 12442.5
(Inc)/dec in Investments -6,527 -975 -700 -4,800
(Inc)/dec in Fixed Assets -3,701 -4,542 -4,000 -4,000
Others -218 17 -310 -310
CF from investing activities -10447.0 -5499.2 -5010.0 -9110.0
Issue/(Buy back) of Equity 0 0 0 0
Inc/(dec) in loan funds -373 39 250 -100
Dividend paid & dividend tax -2,900 -2,900 -2,900 -3,081
Inc/(dec) in Sec. premium 0 0 0 0
Others 419 -301 -139 -113
CF from financing activities -2854.1 -3162.5 -2789.3 -3294.0
Net Cash flow 58 99 79 38
Opening Cash 13 71 170 249
Closing Cash 71.1 169.9 249.1 287.6
Source: Company, ICICI Direct Research
Exhibit 18: Balance Sheet | crore
(Year-end March) FY18 FY19 FY20E FY21E
Liabilities
Equity Capital 151 151 151 151
Reserve and Surplus 41,606 45,981 49,506 54,215
Total Shareholders funds 41757.3 46132.4 49657.0 54365.9
Total Debt 111 150 400 300
Deferred Tax Liability 559 564 564 564
Others Liabilties 1,612 2,076 2,116 2,156
Total Liabilities 44038.8 48922.0 52736.6 57385.5
Assets
Gross Block 21,424 26,492 31,592 35,592
Less: Acc Depreciation 8,065 11,084 14,801 18,583
Net Block 13359.0 15407.8 16790.9 17008.8
Capital WIP 2,126 1,600 500 500
Total Fixed Assets 15,485 17,008 17,291 17,509
Investments 35290.2 36515.0 37465.0 42515.0
Inventory 3,161 3,326 3,542 3,701
Debtors 1,462 2,310 2,657 2,961
Loans and Advances 3 16 15 17
Other Current Assets 2,007 1,485 1,799 2,005
Cash 71.1 169.9 249.1 287.6
Total Current Assets 6,704 7,307 8,262 8,971
Creditors 10,497 9,633 8,412 9,375
Provisions 560 624 545 608
Other current Liabilities 4,274 3,743 3,516 3,919
Total Current Liabilities 15,331 14,001 12,474 13,902
Net Current Assets -8627.2 -6693.6 -4212.1 -4931.0
Other Assets 1,891 2,093 2,193 2,293
Application of Funds 44038.8 48922.0 52736.6 57385.5
Source: Company, ICICI Direct Research
Exhibit 19: Key ratios
(Year-end March) FY18 FY19 FY20E FY21E
Per share data (|)
EPS 255.6 248.3 212.7 257.9
Cash EPS 346.9 348.2 335.7 383.1
BV 1,382.3 1,527.2 1,643.8 1,799.7
DPS 80.0 80.0 80.0 85.0
Cash Per Share 2.4 5.6 8.2 9.5
Operating Ratios
EBITDA Margin (%) 15.1 12.8 10.7 11.5
PBIT / Net sales (%) 11.7 9.3 6.1 7.3
PAT Margin (%) 9.7 8.7 8.0 8.7
Inventory days 14.5 14.1 16.0 15.0
Debtor days 6.7 9.8 12.0 12.0
Creditor days 48.0 40.9 38.0 38.0
Return Ratios (%)
RoE 18.5 16.3 12.9 14.3
RoCE 21.1 16.3 9.4 11.5
RoIC 91.7 58.1 28.2 37.3
Valuation Ratios (x)
P/E 28.9 29.8 34.8 28.7
EV / EBITDA 15.7 17.1 21.7 17.6
EV / Net Sales 2.4 2.2 2.3 2.0
Market Cap / Sales 2.8 2.6 2.8 2.5
Price to Book Value 5.4 4.8 4.5 4.1
Solvency Ratios
Debt/EBITDA 0.0 0.0 0.0 0.0
Debt / Equity 0.0 0.0 0.0 0.0
Current Ratio 0.6 0.7 0.9 0.9
Quick Ratio 0.3 0.4 0.5 0.5
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 10
ICICI Direct Research
Result Update | Maruti Suzuki India
Exhibit 20: ICICI Direct coverage universe (Auto & Auto Ancillary)
Sector / Company CMP M Cap
(|) TP(|) Rating (| Cr) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
Apollo Tyre (APOTYR) 181 200 Hold 10360 11.9 14.8 16.6 15.2 12.2 10.9 7.9 7.9 7.4 8.0 7.7 8.2 8.3 7.9 8.4
Ashok Leyland (ASHLEY) 75 75 Hold 21987 6.8 5.8 6.2 11.1 12.9 12.1 5.8 6.3 5.8 26.9 22.7 22.2 24.3 18.8 18.1
Bajaj Auto (BAAUTO) 3160 3300 Hold 91454 161.6 175.0 189.0 19.6 18.1 16.7 14.9 13.9 11.9 21.0 19.5 25.9 19.9 20.6 19.8
Bharat Forge (BHAFOR) 453 515 Buy 21081 22.2 23.5 24.9 20.4 19.2 18.2 11.5 11.5 10.8 17.9 16.0 16.3 19.1 17.6 16.9
Eicher Motors (EICMOT) 21128 18175 Hold 57594 808.1 907.0 1029.4 26.1 23.3 20.5 13.4 12.6 10.9 32.5 27.3 25.2 24.8 22.5 21.1
Exide Industries (EXIIND) 176 230 Buy 14947 9.9 12.3 14.1 17.7 14.3 12.4 10.6 8.5 7.5 18.4 20.8 20.5 12.9 15.5 15.7
Hero Moto (HERHON) 2700 3110 Buy 53919 169.5 195.0 182.9 15.9 13.8 14.8 10.0 10.5 9.7 37.1 30.1 29.8 26.3 23.9 23.0
Mahindra & Mahindra (MAHMAH) 520 660 Buy 64646 38.6 44.0 34.2 13.5 11.8 15.2 10.0 9.4 9.4 17.3 14.7 13.2 14.1 11.6 10.3
Maruti Suzuki (MARUTI) 7396 6420 Reduce 223418 248.3 212.7 257.9 29.8 34.8 28.7 17.1 21.7 17.6 16.3 9.4 11.5 16.3 12.9 14.3
Tata Motors (TELCO) 133 125 Hold 50934 -84.6 9.3 21.4 -1.6 14.2 6.2 3.9 3.6 3.1 5.4 9.1 11.3 7.1 9.8 15.4
RoE (%)EPS (|) P/E (x) EV/EBITDA (x) RoCE (%)
Source: Reuters, ICICI Direct Research
ICICI Securities | Retail Research 11
ICICI Direct Research
Result Update | Maruti Suzuki India
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ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
ICICI Securities | Retail Research 12
ICICI Direct Research Result Update | Maruti Suzuki India
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