Result Update: Maruti Suzuki India Ltd - ACCUMULATE - TP Rs.10360 - Kotak

MSIL's 1QFY19 revenues came on expected lines. However below expected EBITDA, lower other income and higher tax led to lower than expected net profit. MSIL reported 24% volume growth and saw its market share increase to 52.5% in 1QFY19.

Key Highlights

- MSIL reported revenue of Rs224.6bn, 28% increase over 1QFY18 revenue of Rs175.5bn. Sales volume in the quarter grew by 24% YoY on the back of strong growth witnessed in Baleno and Dzire sales. MSIL reported below expected EBITDA on account of cost pressure from commodity prices and adverse foreign currency. EBITDA margin increased YoY and QoQ to 14.9%. MSIL reported PAT of Rs19.8bn, 27% growth over 1QFY18 PAT of Rs15.6bn. However PAT came in well below our and street expectation.

Valuation and Outlook

- MSIL is expected to report healthy volume growth in FY19-FY20. Company's existing products continue to do well. Going ahead, we expect new products and facelifts to support volume growth. MSIL's EBITDA margin was on the lower side in 1QFY19. Company highlighted that impact of adverse forex mix will play out in the coming quarters. Over the medium to long term, we expect MSIL to witness gradual improvement in margins. We rate the stock as ACCUMULATE (earlier BUY) with unchanged price target of Rs10,360.

Shares of MARUTI SUZUKI INDIA LTD. was last trading in BSE at Rs.9315.45 as compared to the previous close of Rs. 9396.65. The total number of shares traded during the day was 40480 in over 5909 trades.

The stock hit an intraday high of Rs. 9444 and intraday low of 9292. The net turnover during the day was Rs. 378558640.

Source : Equity Bulls

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