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MARUTI SUZUKI
(Rating: Accumulate; CMP: Rs. 1079; Target: Rs 1280; Upside: 18.6%; Investment Period: 6-12 months)
Investment Rationale
• Series of monetary policy actions by RBI and higher interest rates led the automakers to face headwinds in the
form of lower sales and in-line with this MSI reported 18% de-growth in Q1FY12 to 281526 units. Short term
outlook for MSI seems bleak on the back of mute demand, higher discounts and JPY appreciation putting
pressure on profitability. However, these factors are already factored in the current price which tanked ~12% in
last one month.
• Company is aggressively looking to expand its Diesel portfolio as the difference between petrol and diesel
prices widens on account of petrol price deregulation. Currently the contribution of Diesel portfolio stood at
21% in domestic sales. Maruti recently unveiled new swift at an introductory price of Rs 17 lakh or the base
diesel variant which is competing with Toyota’s Liva, Ford’s Figo and Hyundai’s Brio. In our view, MSI is placed
on the best position in the form of brand loyalty, vast dealer and service network for which the customer is
looking very closely.
At CMP of Rs 1079, the stock is trading at a P/E of 13.15 on TTM basis. EPS on TTM basis is Rs 82.12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MARUTI SUZUKI
(Rating: Accumulate; CMP: Rs. 1079; Target: Rs 1280; Upside: 18.6%; Investment Period: 6-12 months)
Investment Rationale
• Series of monetary policy actions by RBI and higher interest rates led the automakers to face headwinds in the
form of lower sales and in-line with this MSI reported 18% de-growth in Q1FY12 to 281526 units. Short term
outlook for MSI seems bleak on the back of mute demand, higher discounts and JPY appreciation putting
pressure on profitability. However, these factors are already factored in the current price which tanked ~12% in
last one month.
• Company is aggressively looking to expand its Diesel portfolio as the difference between petrol and diesel
prices widens on account of petrol price deregulation. Currently the contribution of Diesel portfolio stood at
21% in domestic sales. Maruti recently unveiled new swift at an introductory price of Rs 17 lakh or the base
diesel variant which is competing with Toyota’s Liva, Ford’s Figo and Hyundai’s Brio. In our view, MSI is placed
on the best position in the form of brand loyalty, vast dealer and service network for which the customer is
looking very closely.
At CMP of Rs 1079, the stock is trading at a P/E of 13.15 on TTM basis. EPS on TTM basis is Rs 82.12.
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