msil 4q fy 2013
TRANSCRIPT
-
7/30/2019 MSIL 4Q FY 2013
1/15
Please refer to important disclosures at the end of this report 1
Y/E March (` cr) 4QFY13* 4QFY12 % chg (yoy) 3QFY13 % chg (qoq)Net Sales 12,793 11,727 9.1 11,200 14.2EBITDA 1,328 859 54.7 891 49.0
EBITDA Margin (%) 10.4 7.3 306bp 8.0 243bp
Adj. PAT 1,148 640 79.3 501 128.9Source: Company, Angel Research; Note: *Financials are derived and are pre SPIL merger
Impressive performance driven by better product-mix and Yen depreciation: For4QFY2013, Maruti Suzuki (MSIL) reported extremely strong results (pre SuzukiPowertrain India Ltd [SPIL] merger), beating our as well as consensus estimates bya significant margin. The top-line registered an in-line growth of 9.1% yoy (14.2%
qoq) to `12,793cr, driven by a strong net average realization growth of 14.7%yoy (flat qoq) owing to better product-mix, price hikes and lower levels ofdiscounts. The volumes however, registered a decline of 4.6% yoy led by weakdemand for entry segment cars (down 13.7% yoy) and slowdown in exports (down10.5% yoy). Nevertheless, the bottom-line at `1,148cr was substantially ahead ofour expectations driven by strong expansion in EBITDA margins (up 306bp yoyand 243bp qoq to 10.4%), higher other income (up 120% qoq) and lower taxrate (17.1% vs 25.8% in 3QFY2013). The EBITDA margin expansion was led by abetter product-mix, price hikes, lower average discounts (at `10,500/unit vs`12,100/unit in 3QFY2013) and favorable currency movement (+ve impact of~120bp qoq). During the quarter, MSIL merged its engine manufacturingsubsidiary SPIL with itself through a share swap ratio of 1:70 as announced earlier.
Outlook and valuation: Going ahead, we expect MSIL to register a healthyvolume growth of ~8% in FY2014 primarily due to the low base of 1HFY2013(on account of the strike at the Manesar plant). Additionally, expected easing ofinterest rates in CY2013 is likely to boost consumer sentiments which may lead todemand revival in the passenger car segment. Further, the ongoing weakness inYen (down ~10% yoy against INR in YTDCY2013), which partially benefitedEBITDA margins in 4QFY2013, is expected to enhance profitability in FY2014 asthe favorable currency impact on indirect exposure is expected to reflectcompletely in FY2014. We expect EBITDA margins to improve 150bp in FY2014,driven by favorable product-mix and currency movement, lower discounts,ongoing cost reduction initiatives and also on account of the SPIL merger. As aresult, we expect MSIL to register a strong earnings CAGR of ~25% overFY2013-15. At `1,673, MSIL is trading at 13.6x FY2015E earnings (including theimpact of SPIL merger). We recommend an Accumulate rating on the stock with atarget price of `1,847, valuing the stock at 15x FY2015 earnings.Key financials (post SPIL merger)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENet Sales 35,587 43,588 48,455 55,723% chg (2.8) 22.5 11.2 15.0
Net Profit 1,635 2,392 3,258 3,720% chg (28.6) 46.3 36.2 14.2
EBITDA (%) 7.1 9.7 11.2 10.9
EPS (`) 54.1 79.2 107.8 123.1P/E (x) 30.9 21.1 15.5 13.6
P/BV (x) 3.3 2.7 2.3 2.0RoE (%) 11.3 14.2 16.2 16.0
RoCE (%) 8.7 12.6 15.3 15.4
EV/Sales (x) 1.1 1.0 0.9 0.7
EV/EBITDA (x) 15.0 10.4 7.8 6.7
Source: Company, Angel Research
ACCUMULATECMP `1,673
Target Price `1,847
Investment Period 12 Months
Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters
MF / Banks / Indian Fls
FII / NRIs / OCBsIndian Public / Others
Abs. (%) 3m 1yr 3yr
Sensex (4.1) 12.6 8.7
Maruti Suzuki 4.6 21.2 25.4
56.2
18.9
22.5
2.4
Face Value (`)
BSE Sensex
Nifty
Reuters Code
MSIL@IN
5
19,287
5,871
MRTI.BO
Automobile
Avg. Daily Volume
Market Cap (` cr)
Beta
52 Week High / Low
48,349
0.9
1,690/1,052
83,315
Net Debt (` cr) (5,744)
Yaresh Kothari022-3935 7800 Ext: 6844
Maruti SuzukiPerformance Highlights
4QFY2013 Result Update | Automobile
April 26, 2013
-
7/30/2019 MSIL 4Q FY 2013
2/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 2
Exhibit 1:Quarterly financial performance (pre SPIL merger)Y/E March (` cr) 4QFY13* 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 12,793 11,727 9.1 11,200 14.2 43,077 35,587 21.0Raw-material cost 9,789 9,333 4.9 8,784 11.4 33,575 28,066 19.6(% of Sales) 76.5 79.6 78.4 77.9 78.9
Staff cost 251 246 2.3 231 8.8 956 801 19.3
(% of Sales) 2.0 2.1 2.1 2.2 2.3
Other Expenses 1,424 1,290 10.4 1,294 10.0 5,032 4,207 19.6
(% of Sales) 11.1 11.0 11.6 11.7 11.8
Total Expenditure 11,465 10,869 5.5 10,309 11.2 39,562 33,074 19.6Operating Profit 1,328 858 54.7 891 49.0 3,514 2,513 39.9OPM (%) 10.4 7.3 8.0 8.2 7.1
Interest 19 21 (6.7) 46 (57.8) 136 55 147.2
Depreciation 339 331 2.6 358 (5.3) 1,385 1,138 21.6
Other Income 415 297 39.7 189 119.9 872 827 5.5
PBT (excl. Extr. Items) 1,384 804 72.2 676 104.9 2,865 2,146 33.5Extr. Income/(Expense) - - - - - - -
PBT (incl. Extr. Items) 1,384 804 72.2 676 104.9 2,865 2,146 33.5(% of Sales) 10.8 6.9 6.0 6.7 6.0
Provision for Taxation 237 164 44.2 174 35.8 565 511 10.6
(% of PBT) 17.1 20.4 25.8 19.7 23.8
Reported PAT 1,148 640 79.3 501 128.9 2,300 1,635 40.7Adj PAT 1,148 640 79.3 501 128.9 2,300 1,635 40.7
Adj. PATM 9.0 5.5 4.5 5.3 4.6
Equity capital (cr) 151.0 144.5 144.5 151.0 144.5
Reported EPS (`) 38.0 22.1 71.5 17.4 118.9 76.1 56.6 34.5Source: Company, Angel Research; Note: *Financials are derived and are pre SPIL merger
Exhibit 2:4QFY2013 Actual vs Angel estimatesY/E March (` cr) Actual* Estimates Variation (%)Net Sales 12,793 12,930 (1.1)EBITDA 1,328 1,112 19.4EBITDA margin (%) 10.4 8.6 178bp
Adj. PAT 1,148 722 58.9Source: Company, Angel Research; Note: *Financials are derived and are pre SPIL merger
-
7/30/2019 MSIL 4Q FY 2013
3/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 3
Exhibit 3:Quarterly volume performanceVolume (units) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)A: Mini:M800, Alto, A-Star, WagonR 132,837 153,966 (13.7) 111,709 18.9 429,569 491,389 (12.6)
A: Compact:Swift, Estilo, Ritz 73,895 81,568 (9.4) 68,790 7.4 255,302 235,754 8.3A: Super Compact: Dzire 55,454 40,156 38.1 40,967 35.4 169,571 110,132 54.0
A: Mid-Size:SX4 2,130 5,492 (61.2) 1,716 24.1 6,707 17,997 (62.7)
A: Executive: Kizashi 2 71 - 151 (98.7) 188 458 -
Total Passenger cars 264,318 281,253 (6.0) 223,333 18.4 861,337 855,730 0.7B: Utility Vehicles: Gypsy, Grand Vitara 18,540 1,991 831.2 20,286 (8.6) 79,192 6,525 1,113.7
C: Vans: Omni, Eeco 26,013 38,180 (31.9) 25,338 2.7 110,517 144,061 (23.3)
Total Domestic 308,871 321,424 (3.9) 268,957 14.8 1,051,046 1,006,316 4.4Total Exports 34,838 38,910 (10.5) 32,496 7.2 120,388 127,379 (5.5)Total Volume 343,709 360,334 (4.6) 301,453 14.0 1,171,434 1,133,695 3.3
Source: Company, Angel Research
Top-line growth in line with estimates: For 4QFY2013, net sales registered ahealthy growth of 9.1% yoy (14.2% qoq) to `12,793cr, which was broadly in line
with our estimates. The top-line performance was primarily driven by a strong
14.7% yoy (flat qoq) growth in net average realization, led by better product-mix
(higher share of Swift, Dzire and Ertiga), price hikes and lower levels of discounts
(at `10,500/unit vs `12,100/unit in 3QFY2013). The volumes however, registered
a decline of 4.6% yoy led by the weak demand for entry segment cars (down
13.7% yoy) and slowdown in exports (down 10.5% yoy). The proportion of diesel
cars during the quarter stood at 36.3% as against 39.8% in 3QFY2013. The export
revenue for the quarter stood at `1,530cr (strong growth of 23% yoy and 15.9%
qoq), driven by a robust net average realization growth of 37.4% yoy (8.2% qoq).
The exports performance continues to benefit from the sales of Ertiga kits to
Indonesia and favorable forex movement.
Exhibit 4:Volume growth remains under pressure...
Source: Company, Angel Research
Exhibit 5:... net average realization surges 14.7% yoy
Source: Company, Angel Research
343,350
281,526
252,307239,528
360,334
295,896
230,376
301,453
343,709
19.5
(0.6)
(19.6)
(27.6)
4.9 5.1
(8.7)
25.9
(4.6)
(40.0)
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
0
50,000
100,000150,000
200,000
250,000
300,000
350,000
400,000
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)(units) Total volume yoy growth (RHS)
(0.4)3.2 3.4
12.0 11.7
21.318.9
15.714.7
(5.0)
0.0
5.0
10.0
15.0
20.0
25.0
0
50,000
100,000150,000
200,000
250,000
300,000
350,000
400,000
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)(`) Net average realisation/unit yoy growth (RHS)
-
7/30/2019 MSIL 4Q FY 2013
4/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 4
Exhibit 6:... leading to net-sales growth of 9.1% yoy
Source: Company, Angel Research
Exhibit 7:Domestic passenger car market share trend
Source: Company, SIAM, Angel Research
Exhibit 8:Quarterly revenue and realization performance2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13*
Domestic revenue (` cr) 6,547 6,589 10,242 9,429 6,612 9,637 11,037Change yoy (%) (17.6) (21.9) 14.7 27.6 1.0 46.3 7.8
Domestic realization (`) 294,367 311,096 318,656 358,165 314,921 358,310 357,321
Change yoy (%) 3.0 10.4 11.5 21.5 7.0 15.2 12.1
Export revenue (` cr) 889 938 1,244 1,100 824 1,320 1,530Change yoy (%) (10.4) 11.8 43.0 26.9 (7.3) 40.7 23.0
Export realization (`) 297,314 338,323 319,712 337,092 403,486 406,204 439,176
Change yoy (%) 7.1 25.7 13.7 19.9 35.7 20.1 37.4
Source: Company, Angel Research; ; Note: * Derived and are pre SPIL merger
Favorable currency impact and better product-mix boosts margins: MSILs EBITDAmargin registered a sharp expansion of 306bp yoy to 10.4%, which was
significantly ahead of our estimates of 8.6%. The EBITDA margin expansion was
led by better product-mix, price hikes, lower average discounts and favorable
currency movement (+ve impact of ~120bp qoq). The raw-material cost as a
percentage of sales declined 310bp yoy to 76.5%, led largely by superior product-
mix (towards Swift, Dzire and Ertiga), positive impact of Yen depreciation and
ongoing cost reduction initiatives. Due to the favorable movement in exchange
rate, the royalty outgo during the quarter stood at 4.8% (down 30bp yoy and 80bp
qoq). On a sequential basis, EBITDA margin improved 243bp, led by the positiveimpact of the exchange rate (~120bp) and growth in net average realization
(~100bp). Consequently, operating profit jumped 54.7% yoy (49% qoq) to
`1,328cr.
10,005 8,454 7,674 7,732 11,727 10,778 8,305 11,200 12,793
18.8
2.7
(16.1) (18.6)
17.227.5
8.2
44.9
9.1
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)(`cr) Net sales yoy change (RHS)
48.044.7
40.9 38.743.6
44.1
37.6
47.3 51.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)
-
7/30/2019 MSIL 4Q FY 2013
5/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 5
Exhibit 9:EBITDA margin surges to 10.4%
Source: Company, Angel Research
Exhibit 10:Net profit zooms, up 79.3% yoy
Source: Company, Angel Research
Net profit zooms, up 79.3% yoy: Led by strong operating performance, higherother income (up 120% qoq) and lower tax rate (17.1% vs 25.8% in 3QFY2013),
net profit surged 79.3% yoy (128.9% qoq) to `1,148cr, which was significantly
ahead of our as well consensus estimates.
Exhibit 11:Quarterly financial performance (post SPIL merger)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 13,304 11,727 13.4 11,200 18.8 43,588 35,587 22.5Consumption of RM 8,289 8,920 (7.1) 8,217 0.9 30,554 26,533 15.2
(% of Sales) 62.3 76.1 73.4 70.1 74.6
Staff Costs 387 246 57.6 231 67.7 1,070 801 33.5
(% of Sales) 2.9 2.1 2.1 2.5 2.3
Purchases of TG 440 413 6.7 567 (22.3) 1,961 1,533 28.0
(% of Sales) 3.3 3.5 5.1 4.5 4.3
Other Expenses 2,187 1,290 69.6 1,294 69.1 5,774 4,207 37.2
(% of Sales) 16.4 11.0 11.6 13.2 11.8
Total Expenditure 11,304 10,869 4.0 10,309 9.7 39,358 33,074 19.0Operating Profit 2,000 859 132.9 891 124.4 4,230 2,513 68.3OPM (%) 15.0 7.3 8.0 9.7 7.1
Interest 73 21 249.4 46 58.2 190 55 243.8
Depreciation 816 331 146.8 358 127.7 1,861 1,138 63.5
Other Income 399 297 34.4 189 111.5 812 827 (1.8)
PBT (excl. Extr. Items) 1,510 804 87.8 676 123.5 2,991 2,146 39.4Extr. Income/(Expense) - - - - - - -
PBT (incl. Extr. Items) 1,510 804 87.8 676 123.5 2,991 2,146 39.4(% of Sales) 11.4 6.9 6.0 6.9 6.0
Provision for Taxation 270 164 64.8 174 55.1 599 511 17.2
(% of PBT) 17.9 20.4 25.8 20.0 23.8
Reported PAT 1,240 640 93.7 501 147.3 2,392 1,635 46.3Adj PAT 1,240 640 93.7 501 147.3 2,392 1,635 46.3
Adj. PATM 9.3 5.5 4.5 5.5 4.6
Equity capital (cr) 151.0 144.5 144.5 151.0 144.5Reported EPS (`) 41.0 22.1 85.3 17.4 136.5 79.2 56.6 39.9Source: Company, Angel Research
10.1 9.6 5.7 5.2 7.3 7.3 6.1 8.010.4
79.2 79.981.0
79.181.3
79.781.9
80.2 76.5
5.14.8
6.06.0
5.1
6.2
5.4 5.6
4.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
0.0
20.0
40.0
60.0
80.0
100.0
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)(%) EBITDA margin Raw material cost/sales
Royalty expenses/sales (RHS)
660 549 24 0 206 640 424 227 501 1,148
6.6 6.5
3.12.7
5.5
3.9
2.7
4.5
8.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.08.0
9.0
10.0
0
200
400
600
800
1,000
1,200
1,400
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
3QFY13
4QFY13
(%)(`cr) Net profit Net profit margin (RHS)
-
7/30/2019 MSIL 4Q FY 2013
6/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 6
Exhibit 12:SPIL performanceY/E March (` cr) FY2011 FY2012 FY2013Total volumes (units) 203,750 244,500 292,000
Net average realization (`) 197,301 186,151 205,479Net sales 4,020 4,551 6,000EBITDA 639 550 671
EBITDA margin (%) 15.9 12.1 11.2
Net profit 121 115 92Source: Company, Angel Research
SPIL merger benefitted MSIL performance: MSIL merged SPIL with itself during thequarter through a share swap ratio of 1:70. MSIL made fresh issue of 13.17mn
shares to Suzuki Motor Corporation, Japan, in lieu of its 70% holding in SPIL. For
FY2013, SPIL reported net sales of `6,000cr, EBITDA of `671cr and net profit of
`92cr. As a result of the merger, SPILs net fixed assets of `2,143cr were
transferred to MSIL. The SPIL merger led to a 150bp improvement in MSILs
EBITDA margin.
Conference call Key highlights
Petrol car sales for the industry declined 17% in FY2013 while those of dieselcars surged 23%. As a result the share of the diesel cars in the total volumes
increased to 58% in FY2013 from 48% in FY2012. However, for MSIL, diesel
car sales accounted for ~37% of the total domestic volumes.
The import content for MSIL has come down to 19.6% from 26% in FY2012 onaccount of Yen depreciation and the ongoing localization initiatives. The
Management expects to improve localization by 8-10% over the next 2-3
years.
The average discounts for MSIL stood at `10,500/vehicle during the quarter asagainst `12,100/vehicle in 3QFY2013 and `13,500 in 4QFY2012. Going
ahead, MSIL expects average discounts to remain stable at current levels.
The royalty expenses as a percentage of sales declined 80bp qoq to 4.8%driven by Yen depreciation vs the INR.
The company had hedged its entire Yen exposure (direct + indirect + royalty)at 90 Yen to the US$ in 4QFY2013. For FY2014, the company has hedged
30% of its Yen exposure at a rate of 95.
The company indicated that rural sales grew by 15% in FY2013, accountingfor 28% of total domestic sales.
Other income during the quarter jumped significantly as the company bookedgains on FMPs.
The tax-rate was lower than expected as the company did not pay tax on theincome booked on FMPs. MSIL expects the tax-rate to remain in the range of
20-22% going forward.
-
7/30/2019 MSIL 4Q FY 2013
7/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 7
Investment arguments
Per capita car penetration near inflexion point: In FY2009, car penetration inIndia was estimated at around 12 vehicles/1,000 people compared to around
21 vehicles/1,000 people in China. Moreover, Indias PPP-based per capita is
estimated to approach US$5,000 over the next four to five years, which is
expected to be the inflexion point for the countrys car demand. Further, MSIL
has a sizeable competitive advantage over new foreign entrants due to its
widespread distribution network (nearly 3,000 and 1,000 service and sales
outlets, respectively), which is not easy to replicate.
Suzuki focusing to make Maruti a small car manufacturing hub: Suzuki Japanis making Maruti a manufacturing hub to cater to the increasing global
demand for small cars due to rising fuel prices and stricter emission standards.
Thus, we believe there is a huge potential for the company to increase its
market share in the export market. Moreover, R&D capabilities, so far largely
housed at Suzuki Japan, are progressively moving to MSIL. The company is
aiming to achieve full model change capabilities over the next couple of years,
which will enable it to launch new models and variants at a much faster pace.
This is expected to reduce its royalty payment in the medium-term (2-3 years).
Merger with SPIL to be positive in the long run: MSIL has merged its associatecompany, SPIL with itself. SPIL, a 70:30 JV between Suzuki Motor Corporation
(SMC), Japan, and MSIL, manufactures and supplies diesel engines and
transmission components for vehicles. SPIL currently supplies ~90% of its
production to MSIL. We believe the merger of SPIL with MSIL is positive for
MSIL given that MSIL itself is setting up a new diesel engine facility (capacity of
300,000 units by FY2014) in Gurgaon. Further, with increasing trend of
dieselization, the integration of SPIL will result in better control over diesel
engine sourcing, flexibility in production planning, and managing fluctuations
in market demand. Additionally, single management control of diesel engine
operations will result in better sourcing, localization and cost-reduction.
-
7/30/2019 MSIL 4Q FY 2013
8/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 8
Outlook and valuation
We broadly retain our volume estimates for MSIL and expect the company to
register a healthy volume growth of ~8% in FY2014 primarily due to the low base
of 1HFY2013 (on account of the strike at the Manesar plant). Additionally,
expected easing of interest rates in CY2013 is likely to boost consumer sentiments
which may lead to demand revival in the passenger car segment. Further, the
ongoing weakness in Yen (down ~10% yoy against INR in YTDCY2013), which
partially benefited EBITDA margins in 4QFY2013, is expected to enhance
profitability in FY2014 as the favorable currency impact on indirect exposure is
expected to reflect completely in FY2014. We expect EBITDA margin to improve
150bp in FY2014, driven by favorable product-mix and currency movement, lower
discounts, ongoing cost reduction initiatives and also on account of the SPIL
merger. As a result, we expect MSIL to register a strong earnings CAGR of ~25%
over FY2013-15. Our EPS estimates for MSIL (including the impact of SPIL merger)for FY2014/15 stand at `107.8/`123.1.
We continue to remain positive on long-term volume growth in the passenger car
industry, driven by economic growth and low penetration levels in the country. At
`1,673, MSIL is trading at 13.6x FY2015E earnings (including the impact of SPIL
merger). We recommend Accumulate rating on the stock with a target price of`1,847, valuing the stock at 15x FY2015 earnings.
Exhibit 13:Volume assumptionsY/E March FY2010 FY2011 FY2012 FY2013 FY2014E FY2015EA: Mini: M800, A-Star, Alto, WagonR 33,028 573,238 491,389 429,569 446,752 491,427A: Compact: Swift, Estilo, Ritz 633,190 261,799 235,754 255,302 280,832 317,340
A: Super Compact: Dzire 99,315 107,955 110,132 169,571 193,311 220,374
A: Midsize: SX4 - 23,317 17,997 6,707 7,378 8,115
A: Executive: Kizashi - 138 458 188 207 227
Total passenger cars 765,533 966,447 855,730 861,337 928,479 1,037,485B: UV - Gypsy, Vitara, Ertiga 3,932 5,666 6,525 79,192 88,695 101,112
C: Vans - Omni, Versa, Eeco 101,325 160,626 144,061 110,517 119,358 131,294
Total passenger vehicles - domestic 870,790 1,132,739 1,006,316 1,051,046 1,136,533 1,269,891Total passenger vehicles - exports 147,575 138,266 127,379 120,388 127,611 140,372
Total sales (domestic + exports) 1,018,365 1,271,005 1,133,695 1,171,434 1,264,144 1,410,264% chg 28.6 24.8 (10.8) 3.3 7.9 11.6
Source: Company, Angel Research
Exhibit 14:Angel vs consensus forecastAngel estimates Consensus Variation (%)
FY14E FY15E FY14E FY15E FY14E FY15ETotal op. income (` cr) 48,455 55,723 48,538 56,692 (0.2) (1.7)EPS (`) 107.8 123.1 100.6 124.3 7.2 (0.9)
Source: Bloomberg, Angel Research
-
7/30/2019 MSIL 4Q FY 2013
9/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 9
Exhibit 15:One-year forward P/E band
Source: Company, Angel Research
Exhibit 16:One-year forward P/E chart
Source: Company, Angel Research
Exhibit 17:One-year forward EV/EBITDA band
Source: Company, Angel Research
Exhibit 18:Premium/Discount to Sensex P/E
Source: Company, Angel Research
Exhibit 19:Automobile - Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)
P/E (x) EV/EBITDA (x) RoE (%) FY13E-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)
Ashok Leyland Buy 22 27 18.4 11.4 8.4 5.2 4.4 12.1 15.2 43.9
Bajaj Auto Accumulate 1,893 2,014 6.4 16.1 14.1 10.8 9.1 40.2 36.6 13.8
Hero MotoCorp Accumulate 1,597 1,767 10.6 15.4 11.8 7.6 6.8 38.8 42.7 13.2
Maruti Suzuki Accumulate 1,673 1,847 10.4 15.5 13.6 7.8 6.7 16.2 16.0 24.7Mahi. & Mahi. Accumulate 891 1,006 12.9 15.0 13.1 8.1 6.6 22.3 21.6 11.5
Tata Motors Accumulate 296 324 9.2 9.2 7.6 4.2 3.5 23.1 23.1 16.9
TVS Motor Accumulate 38 40 7.3 7.8 6.5 2.7 2.0 16.5 17.5 16.0
Source: Company, Angel Research
0
500
1,000
1,500
2,000
2,500
Apr-04
Jan-05
Nov-05
Sep-06
Jul-07
May-08
Mar-09
Dec-09
Oct-10
Aug-11
Jun-12
Apr-13
(`) Share price (`) 5x 10x 15x 20x
0
5
10
15
20
25
30
Apr-04
Jan-05
Nov-05
Sep-06
Jul-07
May-08
Mar-09
Dec-09
Oct-10
Aug-11
Jun-12
Apr-13
(x) Absolute P/E Five-yr average P/E
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Ap
r-04
Jan-05
Nov-05
Sep-06
Ju
l-07
May-08
Ma
r-09
De
c-09
Oc
t-10
Aug-11
Jun-12
Ap
r-13
(`cr) EV (` cr) 6x 8x 10x 12x
(60)
(40)
(20)
0
20
40
60
Apr-04
Ja
n-05
Nov-05
Sep-06
J
ul-07
May-08
Mar-09
Dec-09
O
ct-10
Au
g-11
Ju
n-12
Apr-13
(%) Absolute premium Five-yr average premium
-
7/30/2019 MSIL 4Q FY 2013
10/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 10
Company background
Maruti Suzuki (MSIL), a subsidiary of Suzuki Motor Corporation, Japan (with a
54.2% stake), is the largest passenger car (PC) company in India, accounting for
42.4% of the domestic passenger car market. MSIL derives ~75% of its overallsales from the small car segment and has a dominant position in the segment with
a market share of ~50%, led by popular models likeAlto, Wagon R andSwift. The
company operates from two facilities in India (Gurgaon and Manesar) and is in the
process of expanding its manufacturing capacity to 1.9mn units (currently 1.65mn
units) by FY2014. Also, MSIL has steadily increased its presence internationally and
exports now account for ~11% of its overall sales volume.
-
7/30/2019 MSIL 4Q FY 2013
11/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 11
Profit and loss statement (post SPIL merger)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ETotal operating income 29,623 36,618 35,587 43,588 48,455 55,723% chg 42.1 23.6 (2.8) 22.5 11.2 15.0Total expenditure 25,672 32,980 33,074 39,358 43,032 49,655Net raw material costs 22,170 28,364 28,108 32,515 35,697 41,188
Other mfg costs 526 365 411 570 664 737
Employee expenses 538 704 844 1,070 1,233 1,419
Other 2,439 3,547 3,711 5,204 5,439 6,311
EBITDA 3,951 3,639 2,513 4,230 5,423 6,068% chg 115.7 (7.9) (30.9) 68.3 28.2 11.9
(% of total op. income) 13.3 9.9 7.1 9.7 11.2 10.9
Depreciation & amortization 825 1,014 1,138 1,861 2,041 2,203
EBIT 3,126 2,625 1,375 2,368 3,382 3,865% chg 177.7 (16.0) (47.6) 72.3 42.8 14.3
(% of total op. income) 10.6 7.2 3.9 5.4 7.0 6.9
Interest and other charges 34 25 55 190 152 122
Other income 500 509 827 812 894 965
Recurring PBT 3,593 3,109 2,146 2,991 4,124 4,709% chg 114.4 (13.5) (31.0) 39.4 37.9 14.2
Extraordinary income/ (expense) - - - - - -
PBT 3,593 3,109 2,146 2,991 4,124 4,709Tax 1,095 820 511 599 866 989
(% of PBT) 30.5 26.4 23.8 20.0 21.0 21.0
PAT (reported) 2,498 2,289 1,635 2,392 3,258 3,720ADJ. PAT 2,498 2,289 1,635 2,392 3,258 3,720% chg 104.9 (8.4) (28.6) 46.3 36.2 14.2
(% of total op. income) 8.4 6.2 4.6 5.5 6.7 6.7
Basic EPS (`) 82.7 75.8 54.1 79.2 107.8 123.1Adj. EPS (`) 82.7 75.8 54.1 79.2 107.8 123.1% chg 104.9 (8.4) (28.6) 46.3 36.2 14.2
-
7/30/2019 MSIL 4Q FY 2013
12/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 12
Balance sheet statement (post SPIL merger)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity share capital 145 145 145 151 151 151Reserves & surplus 11,691 13,723 15,043 18,428 21,405 24,844
Shareholders Funds 11,835 13,868 15,187 18,579 21,556 24,995Total loans 821 309 1,237 1,389 1,139 889
Deferred tax liability 137 164 302 409 409 409
Other long term liabilities - 96 97 104 104 104
Long term provisions - 140 168 226 226 226
Total Liabilities 12,794 14,577 16,992 20,706 23,433 26,622APPLICATION OF FUNDSGross block 10,407 11,738 14,735 19,600 23,373 26,688
Less: Acc. depreciation 5,382 6,208 7,214 9,075 11,116 13,319
Net Block 5,025 5,529 7,521 10,525 12,257 13,369Capital work-in-progress 388 863 611 1,216 943 829
Investments 7,177 5,107 6,147 7,078 7,967 9,052Long term loans and advances - 1,255 1,672 1,279 1,279 1,279
Other noncurrent assets - 47 26 895 895 895
Current assets 3,772 5,625 6,325 5,695 6,502 8,456Cash 98 2,509 2,436 775 1,690 1,806
Loans & advances 1,656 684 778 1,115 990 1,453
Other 2,019 2,433 3,111 3,805 3,822 5,197
Current liabilities 3,568 3,849 5,311 5,982 6,409 7,256
Net current assets 205 1,776 1,014 (287) 92 1,200Total Assets 12,794 14,577 16,992 20,706 23,433 26,622
-
7/30/2019 MSIL 4Q FY 2013
13/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 13
Cash flow statement (post SPIL merger)
Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit before tax 3,593 3,109 2,146 2,991 4,124 4,709
Depreciation 825 1,014 1,138 1,861 2,041 2,203Change in working capital 133 150 (104) (360) 536 (991)
Direct taxes paid (1,028) (989) (251) (599) (866) (989)
Others (491) (464) (700) (305) - -
Cash Flow from Operations 3,032 2,819 2,229 3,588 5,835 4,931(Inc.)/Dec. in fixed assets (1,459) (2,143) (2,633) (5,470) (3,500) (3,200)
(Inc.)/Dec. in investments (3,879) 2,127 (782) (931) (889) (1,084)
Others 410 359 496 - - -
Cash Flow from Investing (4,928) 343 (2,918) (6,401) (4,389) (4,284)Issue of equity - - - 1,280 - -
Inc./(Dec.) in loans 188 (512) 911 152 (250) (250)
Dividend paid (Incl. Tax) (101) (173) (217) (281) (281) (281)
Others (32) (67) (78) - - -
Cash Flow from Financing 55 (752) 617 1,152 (531) (531)Inc./(Dec.) in cash (1,841) 2,410 (72) (1,661) 915 116
Opening Cash balances 1,939 98 2,509 2,436 775 1,690Closing Cash balances 98 2,509 2,436 775 1,690 1,806
-
7/30/2019 MSIL 4Q FY 2013
14/15
Maruti Suzuki | 4QFY2013 Result Update
April 26, 2013 14
Key ratios
Y/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 20.2 22.1 30.9 21.1 15.5 13.6P/CEPS 15.2 15.3 18.2 11.9 9.5 8.5
P/BV 4.3 3.6 3.3 2.7 2.3 2.0
Dividend yield (%) 0.4 0.4 0.4 0.5 0.5 0.5
EV/Sales 1.3 1.1 1.1 1.0 0.9 0.7
EV/EBITDA 9.4 10.8 15.0 10.4 7.8 6.7
EV / Total Assets 2.9 2.7 2.2 2.1 1.8 1.5
Per Share Data (`)EPS (Basic) 82.7 75.8 54.1 79.2 107.8 123.1
EPS (fully diluted) 82.7 75.8 54.1 79.2 107.8 123.1
Cash EPS 110.0 109.3 91.8 140.8 175.4 196.1
DPS 6.0 7.5 7.5 8.0 8.0 8.0
Book Value 391.8 459.1 502.8 615.0 713.6 827.4
Dupont AnalysisEBIT margin 10.6 7.2 3.9 5.4 7.0 6.9
Tax retention ratio 69.5 73.6 76.2 80.0 79.0 79.0
Asset turnover (x) 2.8 3.0 2.7 2.5 2.3 2.4
ROIC (Post-tax) 20.7 15.6 7.9 11.0 12.8 13.1
Cost of Debt (Post Tax) 3.1 3.3 5.4 11.6 9.5 9.5
Leverage (x) (0.5) (0.5) (0.5) (0.3) (0.4) (0.4)
Operating ROE 11.1 9.1 6.7 11.2 11.5 11.7
Returns (%)ROCE (Pre-tax) 27.2 19.2 8.7 12.6 15.3 15.4
Angel ROIC (Pre-tax) 61.8 41.3 17.7 17.5 17.1 17.3
ROE 23.6 17.8 11.3 14.2 16.2 16.0
Turnover ratios (x)Asset Turnover (Gross Block) 3.1 3.3 2.7 2.5 2.3 2.2
Inventory / Sales (days) 13 13 16 15 15 16
Receivables (days) 11 8 9 10 10 10
Payables (days) 35 29 37 36 36 36
WC cycle (ex-cash) (days) 2 (3) (11) (10) (10) (7)
Solvency ratios (x)Net debt to equity (0.5) (0.5) (0.5) (0.3) (0.4) (0.4)
Net debt to EBITDA (1.6) (2.0) (2.9) (1.5) (1.6) (1.6)
Interest Coverage (EBIT / Int.) 93.3 105.0 24.9 12.5 22.3 31.8
-
7/30/2019 MSIL 4Q FY 2013
15/15
Maruti Suzuki | 4QFY2013 Result Update
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMERThis document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investmentdecision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make
investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
document are those of the analyst, and the company may or may not subscribe to all the views expressed within.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. WhileAngel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or
other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in
the past.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may haveinvestment positions in the stocks recommended in this report.
Disclosure of Interest Statement Maruti Suzuki
1. Analyst ownership of the stock No
2. Angel and its Group companies ownership of the stock No
3. Angel and its Group companies' Directors ownership of the stock No
4. Broking relationship with company covered No
Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)
Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors