Please refer to important disclosures at the end of this report
1
Maruti Suzuki India Limited (MSIL) is a holding company engaged in the
manufacture, purchase and sale of motor vehicles, components and spare parts
(automobiles). The company expects retail sales to pick up during the festival
season on the back of Seventh Pay Commission payouts and a normal Monsoon.
W
ith the success of the Baleno, Brezza and Ciaz all being in the premium
segment, MSIL has pointed key product portfolio gaps and with Nexa strategy the
company is all set to fully capitalize on the premium trend in India’s PV industry.
The company expects double-digit volume growth for FY17, driven by strong
retail sales during the festival season and pull-back in rural areas. The
proportion of first-time car buyers is still ~45% lower than historical levels o
f
~50%+, thereby implying confined demand in the system. Management expects
cost savings by way of platform consolidation were MSIL currently sells 16
models on eight platforms. Its target is to bring down the number of platforms
from 7-8 currently to ~3-4 by 2020. MSIL’s capacity expansion plans, which we
believe will take the company closer to its goal of manufacturing 2 million
vehicles by 2020.The implementation of GST, on the proposed tax structure will
lower the prices of smaller cars were the company has been a market leader.
The company has reduced its debt and is virtually debt free company.
The company has been maintaining a healthy dividend payout of 19.66%.
Hence Buy.
BUY
CMP `5,521
Stock Info
Sector
Beta 1.0
Bloomberg Code
Shareholding Pattern (%)
Promoters 56.2
MF / Banks / Indian Fls 17.1
FII / NRIs / OCBs 23.7
Indian Public / Others 3.0
Abs. (%) 3m 1yr 3yr
Sensex 6.1 10.1 43.2
Maruti Suzuki 33.8 18.0 303.7
Automobiles
Market Cap (
`
cr) 1,67,926
52 Week High / Low 5630/3202
Avg. Daily Volume 75,501
Face Value (
`
)5
BSE Sensex 28,293
Nifty 8,745
Reuters Code MRTI.BO
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Maruti Suzuki India
Others |
A
utomobiles
September 29, 2016
Maruti Suzuki India |
A
utomobiles
September 29, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Maruti Suzuki India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)