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Maruti Suzuki (MSIL) - Qtr. Update - Dtd. - January 25, 2013




Axis Capital Limited


25 Jan 2013





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MSIL’s operating performance was above estimates due to strong QoQ realization growth (4% vs. estimate of 2.6%) during the quarter. Revenue at Rs 112 bn and EBIDTA at Rs 8.9 bn were 5% above estimates as average discount on petrol cars declined 10% QoQ to Rs 18,755/unit. Margin improved 190 bps QoQ to 8.0% (in line). PAT at Rs 5bn was in line due to higher depreciation and tax rate. Our TP implies an upside of 16% from CMP of Rs 1,600. We upgrade our FY13E, FY14E, and FY15E EPS by 5%, 7%, and 5% to Rs 63.8, Rs 102.4, Rs 135.3 respectively to factor in favorable exchange rate of Yen/USD of 85.5. Maintain BUY with revised SOTP-based TP of Rs 1,858 (Rs 1,787 earlier). We value standalone business at EV/EBIDTA of 8.6 and 6.5 for FY14E and FY15E and assign Rs 40/share to Suzuki Powertrain India Ltd. Key highlights:  Lower average discount in the quarter attributable to new Alto. Expect discounts to inch up QoQ as demand for petrol cars continues to be weak  Company has hedged its Q4 yen requirements at 82-84 Yen/USD and has started hedging H1FY14 at Yen/USD of 86 and above Regards, Chirag Shah (Sr VP – Automobiles) Institutional Equity Research Axis Capital Ltd Tel: 9122 4325 1148 Ronak Sarda (Asst VP – Automobiles) Institutional Equity Research Axis Capital Ltd Tel: 9122 4325 1137

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