Maruti Suzuki India (MSIL IN) - Operational performance remains strong; realization improves led by product mix - CSEC Research

Operational performance remains strong; realization improves led by product mix

- In 4QFY17, Maruti Suzuki (MSIL) reported revenues at INR183.3bn, up 20.3% YoY led by the volume growth of 15% YoY & 4.9% YoY realization growth. The company's total sales volume stood at 414,439 vehicles in 4QFY17. Total sales for the FY17 stood at 1.56mn. Average discount for 4QFY17 was at INR 15, 194 vs. INR17, 500 in 4QFY16 while average discount for FY17 was at INR16, 774 vs. INR 18,869 in FY16.

- EBITDA margin declined by 131 bps YoY to 14.0% on account of higher material cost (+360 bps YoY) which was partly offset by lower employee cost (-60 bps YoY) and other expenses (-170 bps YoY). PAT margin declined by 40 bps YoY to 9.3%.).

Valuation: For FY17, MSIL's CapEx stood at INR 32bn and the company has planned to spend INR 45bn for FY18. Currently, the stock is trading at P/E of 21.0X FY2019E. We maintain OUTPERFORMER rating with a revised target Price of INR 7,405 assigning PE of 23.5X on FY2019E based on consensus estimates. Risks: Unfavorable currency movement, increase in discounts, strong competition in mini and compact segment.

Shares of MARUTI SUZUKI INDIA LTD. was last trading in BSE at Rs.6728.1 as compared to the previous close of Rs. 6762.8. The total number of shares traded during the day was 15623 in over 1509 trades.

The stock hit an intraday high of Rs. 6785.05 and intraday low of 6697. The net turnover during the day was Rs. 105083233.

Source : Equity Bulls

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