ICICI Direct is bearish on Maruti Suzuki India has recommended sell rating on the stock with a target price of Rs 5815 in its research report dated April 26, 2019
ICICI Direct's research report on Maruti Suzuki India
Maruti Suzuki (MSIL) reported a weak operational performance in Q4FY19, especially on the margin front, posting 10.5% EBITDA margins against our expectation of 12.0%. Total operating income was at Rs 21,459 crore, up 1.4% YoY, with the beat being led by higher-than-expected ASPs. Average discounts amounted to Rs 15,125/unit, down 37.8% QoQ. Consequent PAT for the quarter was down 4.6% YoY to Rs 1,796 crore. Volumes for Q4FY19 were at 4.6 lakh units, down 0.7% YoY. The company declared a dividend of Rs 80/share for FY19.
Going forward, we expect sales and PAT to grow at a CAGR of 9.3% & 8.2%, respectively, in FY19-21E. We build in 5.7% volume CAGR and EBITDA margin trajectory of 12.5-13% over FY19-21E. We value MSIL at Rs 5815 i.e. 20x P/E (in line with long term averages) on FY21E EPS of Rs 290.7 and assign a SELL rating on the stock.
For all recommendations report, click here
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