Result Update: Maruti Suzuki India Ltd - ACCUMULATE - TP Rs.8164

MSIL's 1QFY18 results was impacted on certain one-off expenses and cost pressures. On reported numbers, revenue grew by 17% YoY (in line), EBITDA margin came down by 153bps YoY (below estimate) and PAT grew by 4.4% YoY (below estimate). However adjusting for various one-off's, EBITDA margin stood at 13.8% (104bps lower YoY and below estimate) and PAT growth was 17% (above estimate). Result was below expectation at operational front. However, we expect the company's EBITDA margin performance to improve as the new plant ramps-up capacity. Volume growth for the company looks strong on the back of high waiting for some key models. We increase our EBITDA margin estimate for FY19 on expected improvement in product mix and operational leverage benefit from Gujarat plant ramp-up. MSIL volume performance has been strong in a challenging environment and that has led to stock re-rating. Future volume growth outlook for the industry and the company looks healthy and with improved margin the stock could witness further re-rating. We retain ACCUMUALTE on the stock with revised price target of Rs8,164 (earlier Rs6,753).

Shares of MARUTI SUZUKI INDIA LTD. was last trading in BSE at Rs.7745.1 as compared to the previous close of Rs. 7621.95. The total number of shares traded during the day was 63585 in over 3926 trades.

The stock hit an intraday high of Rs. 7779 and intraday low of 7640. The net turnover during the day was Rs. 490514811.

Source : Equity Bulls

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