Maintain Buy on Maruti Suzuki - Volumes Above Estimates - Motilal Oswal

MARUTI SUZUKI: Nov-10 volumes above estimates, with volume of 112,554 units (+28% YoY, -5.3% MoM); Buy

- Maruti's Nov-10 volumes are above estimates with 28% YoY growth (~5% MoM decline) to 112,554 units (est 110,000 units).

- Domestic volumes grew 34% YoY (~5% MoM decline) to 102,503 units. Volume growth was driven by newly launched Eeco (C segment grew by 76% YoY) as well as recently launched Alto K-10 and New Wagon-R.

- While C segment volumes grew 76% YoY (5% MoM decline), both A2 and A3 segment grew 32% YoY (~4% MoM down) and 27% YoY (~4% MoM decline).

- Export volumes were below estimates at 10,051 units (v/s est 11,500), a decline of 12% YoY (~11% MoM), impacted by significant decline in exports to EU.

- It would be taking a week long maintenance shutdown at both its plant from 25/Dec, which would impact Dec-10 volumes.

- We are upgrading our volume estimates for FY11 & FY12 by 2.5% each, translating into EPS upgrade of 2.8% each to Rs84.1 for FY11 and Rs101.9 for FY12. The stock trades at 13.9x FY12 EPS of Rs101.9, 12.9x FY12E consol. EPS of Rs109.8 and 9.7x FY12 Cash EPS. Maintain Buy.

Source : Equity Bulls

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