Buy Maruti Suzuki India Ltd For the Target Rs.13,958 by Choice Broking Ltd
MSIL reported a strong set of numbers driven by a robust volume growth
* Revenue grew 15.6% YoY and 3.5% QoQ to INR 3,84,921 Mn (vs CEBPL est. at INR 3,88,099 Mn) led by 13.0% YoY growth in volume and 2.2% YoY growth in ASP. Volume growth for the quarter was driven by 20.2% YoY growth in the Utility vehicle segment and 38.2% YoY growth in exports.
* EBITDA saw a growth of 14.4% YoY and 1.2% QoQ to INR 44,703 Mn (vs CEBPL est. at INR 44,631 Mn). EBITDA margin de-grew 12bps YoY and 26bps QoQ to 11.6% (vs CEBPL est. at 11.5%).
* APAT grew by 12.6% YoY and 14.9% QoQ to INR 35,250 Mn (vs CEBPL est. at INR 36,217 Mn).
Strong product portfolio with a complete powertrain mix positions MSIL to gain market share in the PV segment: With its first electric SUV, the e-Vitara, launched earlier this month; MSIL now has product offerings across all segments including ICE, CNG, Hybrid and Electric. There is a strong consumer demand for CNG vehicles, with 1 in every 3 cars sold by the company in the domestic market being a CNG vehicle in Q3FY25. MSIL is preparing about 1,500 EV-enabled service workshops across 1,000 cities, with trained manpower and special equipment, along with roadside assistance. We believe that MSIL, having a strong distribution network (3,925 sales outlets, 5000 service touch-points) can now cater to all consumer segments and will increase its market share in the passenger vehicle segment.
Promising outlook for export: Exports for the quarter were at 99,220 vehicles, the highest ever in any quarter, with a growth of about 38% on a YoY basis. MSIL commanded nearly 49% share of India's total passenger vehicle exports in Q3FY25 compared to 42% share in Q3FY24. MSIL also plans to export its first electric SUV, the e-Vitara to around 100 countries. We believe that MSIL has been successful in its efforts to increase exports and expect export segment to grow 20%/15% for FY25/FY26.
View and Valuation: We revise our FY26/27 EPS estimates upward by 8.7%/7.5% and upgrade to a ‘BUY' rating with a revised target price of INR 13,958, valuing the company at 24x(unchanged) on FY27E EPS. We remain positive on long term growth story led by a large distribution network; largest low emission product portfolio with new launch in the EV segment and growing export volumes.
For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131
