Maruti Suzuki India - Q1FY21 Result Update - ICICI Securities

Maruti Suzuki (MSIL) reported a weak operational performance in Q1FY21. Total operating income for Q1FY21 was at Rs. 4,107 crore (down 79.2% YoY), tracking 80.1% drop in volumes to 76,599 units (domestic down 82.1%, exports down 66%) although ASPs surprised positively - up 7.6% QoQ to Rs. 4.80 lakh/unit. MSIL posted loss at EBITDA level of Rs. 863 crore on the back of spike in other expenses & 120 bps sequential gross margin deterioration. Consequent loss at PAT level was at Rs. 249 crore, limited by higher other income on account of fair value gains on investments.

Valuation & Outlook

MSIL is a market leader in the domestic PV segment with balance sheet strength (surplus cash of ~ Rs. 35,000 crore) to navigate through the prevailing difficult demand scenario. However, the stock price appreciation in the recent past limits our margin of safety on the stock, especially in the absence of definitive green shoots on demand front, with MSIL now trading at ~30x P/E on FY22E numbers. Hence, we maintain REDUCE, valuing the stock at Rs. 5,300 i.e. 26x P/E on FY22E EPS of Rs. 203.4.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Maruti_Q1FY21.pdf

Shares of MARUTI SUZUKI INDIA LTD. was last trading in BSE at Rs.6247 as compared to the previous close of Rs. 6265.65. The total number of shares traded during the day was 47079 in over 8791 trades.

The stock hit an intraday high of Rs. 6379.65 and intraday low of 6208. The net turnover during the day was Rs. 296182932.

Source : Equity Bulls

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