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Maruti Suzuki
July 2011 volume: Sales down
Maruti’s July sales declined 25% yoy because it ceased
producing the old Swift and shifted Dzire’s production to
Gurgaon.
Export sales declined 18% yoy.
We expect new launches to drive incremental volume
growth; softening raw material prices and improved
localisation are likely to lead to margin expansion.
Attractively valued at 12.2x FY12E earnings; Maintain
OUTPERFORM, with a price target of Rs1,485.
Total sales down 25% yoy in July 2011. Maruti Suzuki’s
sales declined 25% yoy in July 2011 to 75,300 units
primarily because it stopped producing the old Swift (new
Swift to be launched in August) and shifted Dzire production
to the Gurgaon facility.
Domestic sales down 26% yoy to 66,504 units. Domestic
sales fell 26% yoy in July 2011 to 66,504 units. As per the
new classification, the mini segment (comprising M800, Astar, Alto, WagonR) declined 16% yoy to 38,028 units. The
compact segment (comprising Swift, Estilo, Ritz) declined
56% yoy to 9,099 units. The decline was primarily on
account of the cessation of the production of the older Swift
- only 348 units dispatched in July 2011 against sales of
11,828 units in July 2010. The new Swift is likely to be
launched in mid-August. Furthermore, Swift Dzire sales
declined sharply by 64% yoy to 3,021 units on account of
shifting of Dzire’s production to the Gurgaon facility. SX4
sales continued to be strong with 24% yoy growth to 2,303
units. The Omni / Eeco segment sales declined 2% yoy to
13,379 units.
Exports down 18% yoy to 8,796 units. Export sales
declined 18% yoy to 8,796 units on account of lower
shipments in the month. It is likely to be corrected in the
subsequent month.
Valuation. Forthcoming festive season and new model
launches (refreshed variants of Swift, Swift Dzire and a new
model) are likely to drive incremental volume growth for
MSIL. Softening commodity prices and steady improvement
in localisation is likely to drive margin expansion going
forward. The stock is attractively valued at 12.2x FY12E
earnings and at 6.3x EV/EBITDA. We reiterate
OUTPERFORM with a price target of Rs1,485 (at 14x oneyear rolling forward earnings).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Maruti Suzuki
July 2011 volume: Sales down
Maruti’s July sales declined 25% yoy because it ceased
producing the old Swift and shifted Dzire’s production to
Gurgaon.
Export sales declined 18% yoy.
We expect new launches to drive incremental volume
growth; softening raw material prices and improved
localisation are likely to lead to margin expansion.
Attractively valued at 12.2x FY12E earnings; Maintain
OUTPERFORM, with a price target of Rs1,485.
Total sales down 25% yoy in July 2011. Maruti Suzuki’s
sales declined 25% yoy in July 2011 to 75,300 units
primarily because it stopped producing the old Swift (new
Swift to be launched in August) and shifted Dzire production
to the Gurgaon facility.
Domestic sales down 26% yoy to 66,504 units. Domestic
sales fell 26% yoy in July 2011 to 66,504 units. As per the
new classification, the mini segment (comprising M800, Astar, Alto, WagonR) declined 16% yoy to 38,028 units. The
compact segment (comprising Swift, Estilo, Ritz) declined
56% yoy to 9,099 units. The decline was primarily on
account of the cessation of the production of the older Swift
- only 348 units dispatched in July 2011 against sales of
11,828 units in July 2010. The new Swift is likely to be
launched in mid-August. Furthermore, Swift Dzire sales
declined sharply by 64% yoy to 3,021 units on account of
shifting of Dzire’s production to the Gurgaon facility. SX4
sales continued to be strong with 24% yoy growth to 2,303
units. The Omni / Eeco segment sales declined 2% yoy to
13,379 units.
Exports down 18% yoy to 8,796 units. Export sales
declined 18% yoy to 8,796 units on account of lower
shipments in the month. It is likely to be corrected in the
subsequent month.
Valuation. Forthcoming festive season and new model
launches (refreshed variants of Swift, Swift Dzire and a new
model) are likely to drive incremental volume growth for
MSIL. Softening commodity prices and steady improvement
in localisation is likely to drive margin expansion going
forward. The stock is attractively valued at 12.2x FY12E
earnings and at 6.3x EV/EBITDA. We reiterate
OUTPERFORM with a price target of Rs1,485 (at 14x oneyear rolling forward earnings).
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