Emkay Global Financial Market's research report on Maruti Suzuki India
Q1 revenue declined by 1% (3-yr CAGR of 10%) to Rs265bn, in line with estimates. EBITDA fell by 21% qoq (3-yr CAGR of -2%) to Rs19.1bn, 16% below estimates, mainly due to the higher-than-expected impact of commodity inflation. Management expects benefits of lower commodity prices and JPY depreciation to start reflecting in Q2. The pending order book is large at ~350,000 units, which includes ~70,000 units for Brezza and ~20,000 units for Grand Vitara. The upcoming launches include the Jimny off-roader, below-4m SUV and a mid-size SUV. We expect an 18% volume CAGR for FY22-24E. We reduce FY23E EPS by 4% due to lower other income, while broadly retaining FY24E/25E EPS estimates. We build in a strong revenue CAGR of 24% over FY22-24E, and expect EBITDA margin to expand to 10.7% in FY24E from 6.5% in FY22.
Our positive view is underpinned by expectations of a cyclical upturn and market share recovery. We reaffirm Buy with a revised TP of Rs10,000 (Rs9,650 earlier), based on 27x core P/E on Sep’24E EPS (Jun’24E EPS earlier) and net cash of Rs1,610/share.
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