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R e s u l t s u p b e a t a m i d c h a l l e n g i n g q u a r t e r …
Maruti Suzuki India’s (MSIL) Q1FY12 numbers were above our estimates
with net sales at | 8319.9 crore (I-direct estimate: | 8205.4 crore), a nominal
3.3% YoY increase owing to slowing demand and the 13-day plant strike.
However, on the brighter side, realisations improved 4.0% YoY as the
product mix was enriched through higher A3 segment sales (up 70 bps YoY
at 10.9% of overall sales) along with increased diesel sales (up ~2% YoY).
EBITDA margins were flat YoY at 9.8% (above our estimates at 9.4%).This
was due to strong other expense controls (70 bps decline QoQ). On the
PAT front, MSIL’s profits were boosted through higher other income of ~|
180 crore inclusive of ~| 40 crore one-time capital gains Q1 specific
phenomenon. PAT came in at | 549.2 crore (I-direct estimate: | 432.6 crore)
Highlights of the quarter
After a long time, MSIL has seen a first quarter that was marred by lower
volume growth. In contrast, it was boosted by a strong operative
performance. It had a plant shutdown in Manesar leading to ~15,000 unit
loss along with maintenance shutdown for ~five or six days. On the
negatives, the conversion of footfalls into sales has fallen. The management
expects the same to reduce as the festive season kicks in from next month
onwards. On the other positives, diesel capacity is being increased ~16%
to 2.9 lakh units by Q1FY12 in the Manesar facility. We believe this would
help supply more diesel customers amid rising diesel demand. Capacity is
expected to grow to 1.65 million units post H1FY12. Overall spending was
~ | 4,000 crore for FY12E.
V a l u a t i o n
Going ahead, we are cautious on footfall conversions. However, an
improving product mix would help realisation growth. At the CMP of |
1209, the stock is trading at 13.7x and 11.5x FY12E and FY13E EPS of |
88.1.0 and | 104.9, respectively. We have valued MSIL at 13x FY13E EPS of
| 104.9 to arrive at a value of | 1364 per share. We have maintained our
BUY rating on the stock and suggest that investors who have entered at
higher levels make staggered entry on dips.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R e s u l t s u p b e a t a m i d c h a l l e n g i n g q u a r t e r …
Maruti Suzuki India’s (MSIL) Q1FY12 numbers were above our estimates
with net sales at | 8319.9 crore (I-direct estimate: | 8205.4 crore), a nominal
3.3% YoY increase owing to slowing demand and the 13-day plant strike.
However, on the brighter side, realisations improved 4.0% YoY as the
product mix was enriched through higher A3 segment sales (up 70 bps YoY
at 10.9% of overall sales) along with increased diesel sales (up ~2% YoY).
EBITDA margins were flat YoY at 9.8% (above our estimates at 9.4%).This
was due to strong other expense controls (70 bps decline QoQ). On the
PAT front, MSIL’s profits were boosted through higher other income of ~|
180 crore inclusive of ~| 40 crore one-time capital gains Q1 specific
phenomenon. PAT came in at | 549.2 crore (I-direct estimate: | 432.6 crore)
Highlights of the quarter
After a long time, MSIL has seen a first quarter that was marred by lower
volume growth. In contrast, it was boosted by a strong operative
performance. It had a plant shutdown in Manesar leading to ~15,000 unit
loss along with maintenance shutdown for ~five or six days. On the
negatives, the conversion of footfalls into sales has fallen. The management
expects the same to reduce as the festive season kicks in from next month
onwards. On the other positives, diesel capacity is being increased ~16%
to 2.9 lakh units by Q1FY12 in the Manesar facility. We believe this would
help supply more diesel customers amid rising diesel demand. Capacity is
expected to grow to 1.65 million units post H1FY12. Overall spending was
~ | 4,000 crore for FY12E.
V a l u a t i o n
Going ahead, we are cautious on footfall conversions. However, an
improving product mix would help realisation growth. At the CMP of |
1209, the stock is trading at 13.7x and 11.5x FY12E and FY13E EPS of |
88.1.0 and | 104.9, respectively. We have valued MSIL at 13x FY13E EPS of
| 104.9 to arrive at a value of | 1364 per share. We have maintained our
BUY rating on the stock and suggest that investors who have entered at
higher levels make staggered entry on dips.
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