Result Analysis Maruti Suzuki India

Result Highlight: 

• Maruti Suzuki Revenue rose 15% QoQ and 11.3% YoY to Rs 26740 crore – below the estimates of Rs.26862 Crore. For FY22 Revenue is up 25.5% to Rs. 88,296 Crore from Rs. 70333 Crore in FY21.

• Sales volume during the quarter is down 0.7% YoY to 4,88,830 Units in Q4FY22 however up by 13.5% QoQ.

• The sales in the export market were at 68,454 units which is the highest ever in any Quarter.

• Net profit rose 57.7% YoY to Rs 1839 crore for the March quarter compared with Rs.1166 crore in the same quarter last year. For FY22 Net Profit fell 11% to Rs. 3766 Crore from Rs. 4230 Crore in FY21 due to higher expenses.

• EBITDA Margin improved to 9.08% in Q4FY22 from 8.29% in Q4FY21 and 6.71% in Q3FY22.

• Margin improvement due to Cost reduction efforts, Lower sales promotion expenses and increase in selling prices with higher non-operating income.

• The company approved final dividend of Rs 60 per share. This is a special one-time gesture to thank shareholders for their patronage and support as the Company commemorates its 40th year since inception.

Management commentary: Chairman – R. C. Bhargava 

• The prices of commodities such as steel, aluminum and precious metals witnessed an unprecedented increase during this year. The Company was forced to increase prices of vehicles to partially offset this impact. The Company continued to work on cost reduction efforts to minimize the impact on customers.

• Market at the lower end has been shrinking significantly over the last three years due to regulatory changes and increase in prices of commodities.

• Small car used to bread and butter for us, the butter has gone away. Affordability of small cars has been hit severely in the last three years.

• A lot of customers have dropped out of the market

• Sales of hatchbacks have declined by over 25% in the last three years.

• Small car market is unlikely to improve going ahead.

• The supply situation of electronic components continues to be unpredictable, and hence it might have some impact on the production volume in FY23. Lost 2.70 lakh cars due to semiconductor in FY22.

• Approves expansion of Manesar Plant by 1 lakh Units. Maruti Suzuki India’s two existing plants at Gurugram and Manesar in Haryana have a combined manufacturing capacity of 15, 80,000 units with Manesar plant have production capacity of 800,000 units every year,

Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)
Disclosure Appendix
Analyst Certification (For Reports)
Israil Khan, Elite Wealth Limited, suhail@elitewealth.in
The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.
As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
(1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
(2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.
For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
Research Excerpts
This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.
Company-Specific Disclosures
Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or emailing research@elitestock.com with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail research@elitestock.com.
Options related research:
If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at https://www.elitewealth.in
Other Disclosures
All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.
Ownership and material conflicts of interest Disclosure
Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
Country Specific Disclosures
India – For private circulation only, not for sale.
Legal Entities Disclosures
Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone:011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in
EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
1. Reports
a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;
(b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;
(c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;
2. Compensation
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;
(c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(d) EWL or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(e) EWL or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with the research report.
3 In respect of Public Appearances
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL