Q3FY21 Result Update - Maruti Suzuki India - ICICI Direct

Maruti Suzuki (MSIL) posted a steady performance in Q3FY21. Total operating income for the quarter was at Rs. 23,458 crore, up 13.3% YoY amid flattish ASPs QoQ at Rs. 4.48 lakh/unit, 13.4% YoY growth in overall volume to 4.96 lakh units. EBITDA in Q3FY21 was at Rs. 2,226 crore with corresponding margins at 9.5%. Margins fell 80 bps QoQ on account of 250 bps gross margin deterioration while the company realised savings in other expenses (% of sales). Consequent PAT was at Rs. 1,941 crore, up 24% YoY, supported by higher other income and lower effective tax rate (20.8%).

Valuation & Outlook

For MSIL we build sales, PAT CAGR of 16.3% & 27.1% respectively in FY21E-23E. In our view, lack of sufficient margin expansion triggers puts already stretched valuations under further strain (trades at ~33x FY23E EPS). We also await decisive commentary from MSIL on the EV front. We maintain our cautious stance on MSIL and value it at Rs. 7,000 i.e., 30x P/E on FY23E EPS (earlier target price Rs. 6,450). We assign REDUCE (SELL earlier) rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Maruti_Q3FY21.pdf

Shares of MARUTI SUZUKI INDIA LTD. was last trading in BSE at Rs.7586.25 as compared to the previous close of Rs. 7866.05. The total number of shares traded during the day was 223975 in over 21088 trades.

The stock hit an intraday high of Rs. 7977 and intraday low of 7557.85. The net turnover during the day was Rs. 1748823955.

Source : Equity Bulls

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