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R e s u l t s f a i l t o c h e er , w o r s t i s b e h i n d …
Maruti Suzuki India’s (MSIL) Q2FY12 numbers were disappointing with
net sales at | 7537.5 crore (I-direct estimate: | 7196.4 crore), a lower than
anticipated decline of 15.7% YoY even as volumes were lower by 19.6%
at 2.5 lakh units. The volume decline was accentuated by a loss of
~29,000 odd units due to the recent labour unrest. The only positive side
came through as realisations improved 4.8% YoY due to the twin impact
of richer product mix in terms of diesel sales (up ~3% YoY) and better
export realisations( up 6.6% YoY). EBITDA margins took a steep hit,
declining to 6.6%, a 320 bps QoQ hit. This was due to ~160 bps MTM hit
taken due to unfavourable currency movement and a combination of high
ad spends (up 100 bps QoQ) and lower leverage benefits owing to strike.
Thus, PAT came in much below our estimates at | 240.4 crore (I-direct
estimate: | 411.4crore).
Highlights of the quarter
MSIL’s Q2FY12 has been marred by negatives on various fronts ranging
from currency challenges to deep labour unrest. It lost 28,539 units due to
the strike in the Manesar facility, which came to a conclusion only in
October 2011. The unprecedented JPY, INR movements have hurt the
hedges undertaken on both the royalty, raw material front and caused ~|
127 crore one-time impact. On the positive side, MSIL has witnessed
bookings of more than 1 lakh units for the new Swift. The management
reflected on the growing demand for diesel vehicles in view of higher
pricing gap between the fuels and is expected to ramp up the diesel
vehicle capacity to ~25,000 units/month by the end of Q3FY12. Diesel
sales in proportion to total volumes were ~up 300 bps YoY at 21%. This
would help in continuing the realisations growth in the domestic market.
V a l u a t i o n
MSIL witnessed one of the worst operational performances. However,
with easing of JPY to ~80 levels, the management has actively started to
hedge its FY12E exposure. At the CMP of | 1125, the stock is trading at
11.8x FY13E EPS. We have valued MSIL at 13.5x FY13E EPS to arrive at a
value of | 1286/share. We maintain our BUY rating on the stock and
suggest investors who entered at higher levels make a staggered entry.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R e s u l t s f a i l t o c h e er , w o r s t i s b e h i n d …
Maruti Suzuki India’s (MSIL) Q2FY12 numbers were disappointing with
net sales at | 7537.5 crore (I-direct estimate: | 7196.4 crore), a lower than
anticipated decline of 15.7% YoY even as volumes were lower by 19.6%
at 2.5 lakh units. The volume decline was accentuated by a loss of
~29,000 odd units due to the recent labour unrest. The only positive side
came through as realisations improved 4.8% YoY due to the twin impact
of richer product mix in terms of diesel sales (up ~3% YoY) and better
export realisations( up 6.6% YoY). EBITDA margins took a steep hit,
declining to 6.6%, a 320 bps QoQ hit. This was due to ~160 bps MTM hit
taken due to unfavourable currency movement and a combination of high
ad spends (up 100 bps QoQ) and lower leverage benefits owing to strike.
Thus, PAT came in much below our estimates at | 240.4 crore (I-direct
estimate: | 411.4crore).
Highlights of the quarter
MSIL’s Q2FY12 has been marred by negatives on various fronts ranging
from currency challenges to deep labour unrest. It lost 28,539 units due to
the strike in the Manesar facility, which came to a conclusion only in
October 2011. The unprecedented JPY, INR movements have hurt the
hedges undertaken on both the royalty, raw material front and caused ~|
127 crore one-time impact. On the positive side, MSIL has witnessed
bookings of more than 1 lakh units for the new Swift. The management
reflected on the growing demand for diesel vehicles in view of higher
pricing gap between the fuels and is expected to ramp up the diesel
vehicle capacity to ~25,000 units/month by the end of Q3FY12. Diesel
sales in proportion to total volumes were ~up 300 bps YoY at 21%. This
would help in continuing the realisations growth in the domestic market.
V a l u a t i o n
MSIL witnessed one of the worst operational performances. However,
with easing of JPY to ~80 levels, the management has actively started to
hedge its FY12E exposure. At the CMP of | 1125, the stock is trading at
11.8x FY13E EPS. We have valued MSIL at 13.5x FY13E EPS to arrive at a
value of | 1286/share. We maintain our BUY rating on the stock and
suggest investors who entered at higher levels make a staggered entry.
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