Arihant Capital has given Accumulate recommendation for Maruti Suzuki India with a target price of Rs. 8862 in its research report issued on May 02, 2022

Arihant Capital’s research report on Maruti Suzuki India

Maruti Suzuki (MSIL), Beat estimates on all fronts in Q4FY22. Reported standalone revenue stood at INR 267,400 Mn, against our estimate of INR 267,329 Mn registering 15% QoQ/11% YoY. EBITDA stood at INR 24,268 Mn, against our estimate of INR 19,184 Mn, Registering a growth of 56%QoQ/22%YoY. On the margins front, EBITDA margin expanded by 2bps QoQ and contracted on 1bps YoY to 9.08%, against our estimate of 7.2%. Due to relatively better sales volume leading to improved capacity utilization, lower sales promotion expenses and increase in selling prices and also the company cost reduction initiatives. Standalone PAT saw an increase of 82%QoQ/58% YoY to INR 18,389 Mn against our estimate of INR 12,303 Mn. EPS stood at INR 60.87 in Q4FY22 against INR 33.48 in Q3FY22 (INR 38.60 in Q4FY21). Total Volume was up by 14%QoQ/-1% YoY to 4,88,830 units. The Company recorded its highest ever exports of 238,376 units in FY 2021-22 compared to 96,139 units in FY 2020-21. This was also about 62% higher than the peak exports in any financial year so far. The Board of Directors has recommended a dividend of INR 60 per share.

Outlook

We value Maruti at 28x FY24 EPS of INR 316.5 for the Target Price of INR 8,862 per share. We maintain our Accumulate rating.

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