1QFY2019 Result Update | Automobile
July 27, 2018
Maruti Suzuki India
BUY
CMP
`9,315
Performance Update
Target Price
`10,820
Y/E March (` cr)
1QFY19
1QFY18
% yoy
4QFY18
% qoq
Investment Period
12 months
Net sales
22,459
17,546
28.0
21,166
6.1
EBITDA
Stock Info
3,351
2,331
43.8
3,015
11.1
Sector
Automobile
EBITDA margin (%)
14.9
13.3
163bp
14.2
68bp
Market Cap (Rs cr)
2,81,505.39
Adjusted PAT
1,975
1,556
26.9
1,882
5.0
Net Debt
(35,713)
Source: Company, Angel Research
Beta
1.0
For 1QFY2019, Maruti Suzuki India (MSIL) posted strong numbers both on top-
52 Week High / Low
7,377/10,000
line and bottom-line fronts. MSIL reported
~28% yoy top-line growth to
Avg. Daily Volume
35,065
Face Value (Rs)
5
`22,459cr on back of strong volume growth (up ~24% yoy) and price hike
BSE Sensex
37,340
(up~3% yoy). The company’s operating margins improved by robust 163bps yoy.
Nifty
11,276
On the bottom-line front, MSIL reported growth of ~27% yoy to `1,975cr on the
Reuters Code
MRTI.BO
back of strong operating performance.
Bloomberg Code
MSIL.IN
Robust top-line growth: MSIL’s top-line grew by ~28% yoy to `22,459cr on the
back of ~24% yoy volume growth and ~3% average price hikes. During the
Shareholding Pattern (%)
quarter, domestic sales grew by ~26% yoy (which is ~95% of total revenue)
Promoters
56.2
and exports grew by 2% (which is ~5% of total revenue).
MF / Banks / Indian Fls
6.2
FII / NRIs / OCBs
23.7
Strong operating performance aids profitability: On the operating front, the
Indian Public / Others
13.9
company reported better margins, up 163bps yoy at 14.9%. On the bottom-line
front, MSIL reported growth of ~27% yoy to `1,975cr on the back of strong
Abs. (%)
3m 1yr
3yr
Sensex
6.5
14.2
34.2
operating performance and volume growth.
MSIL
5.0
24.0
125.0
Outlook and Valuation: We expect MSIL to report net revenue CAGR of ~16% to
~`1,08,317cr over FY2018-20E mainly due to new launches and upcoming
facelift in various models. Further, on the bottom-line front, we expect CAGR of
Historical share price chart
~18% to `10,892cr over the same period on the back of better margins. Thus,
we maintain our Buy recommendation on MSIL with Target Price of `10,820.
12000
10000
Key Financials
8000
Y/E March (` cr)
FY2017
FY2018
FY2019E
FY2020E
6000
Net sales
68,085
79,809
92,579
108,317
4000
% chg
18.2
17.2
16.0
17.0
2000
Adj. Net profit
7,511
7,881
9,414
10,892
0
% chg
36.6
4.9
19.5
15.7
EBITDA margin (%)
15.2
15.1
15.4
15.4
EPS (`)
248.7
261.0
311.7
360.7
Source: Company, Angel Research
P/E (x)
37.8
36.0
30.1
26.1
P/BV (x)
7.7
6.7
5.8
5.0
RoE (%)
20.3
18.5
19.2
19.4
RoCE (%)
20.6
21.6
22.9
24.0
Research Analyst
EV/Sales (x)
3.7
3.1
2.6
2.2
Amarjeet S Maurya
EV/EBITDA (x)
24.6
20.6
16.9
14.0
022-40003600 Ext: 6831
Source: Company, Angel Research Note
[email protected]
Please refer to important disclosures at the end of this report
1
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Exhibit 1: 1QFY2019 Performance
Y/E March (` cr)
1QFY19
1QFY18
% yoy
4QFY18
% qoq
FY2018
FY2017
% chg
Net Sales
76
70
7.6
76
(0.3)
298
271
9.9
Staff Costs
18
17
5.1
17
5.6
69
65
5.9
(% of Sales)
23.8
24.4
22.5
23.1
24.0
Other Expenses
32
31
2.0
32
0.3
132
115
14.9
(% of Sales)
41.8
44.1
41.5
44.3
42.4
Total Expenditure
50
48
3.1
49
2.2
201
180
11.7
Operating Profit
26
22
17.5
27
(4.8)
97
91
6.4
OPM
34.4
31.5
36.0
32.6
33.6
Interest
1
4
(64.2)
3
(59.1)
15
19
(21.2)
Depreciation
7
6
5.3
7
1.0
26
20
33.5
Other Income
2
5
(48.2)
5
(55.2)
19
4
336.5
PBT (excl. Ext Items)
20
17
22.8
22.7
(10.4)
75
57
32.0
Ext (Income)/Expense
-
-
-
-
-
PBT (incl. Ext Items)
20
17
22.8
23
(10.4)
75
57
32.0
(% of Sales)
26.9
23.6
29.9
25.2
21.0
Provision for Taxation
7
6
19.5
6
6.2
24
20
15.5
(% of PBT)
33.7
34.6
28.4
31.2
35.7
Reported PAT
14
11
24.5
16
(17.0)
52
37
41.1
PATM
17.8
15.4
21.4
17.3
13.5
Minority Interest After NP
Reported PAT
14
11
24.5
16
(17.0)
52
37
41.1
Equity shares (cr)
6
6
6
6
6
FDEPS (Rs)
2.4
1.9
24.5
2.9
(17.0)
9.1
6.4
41.1
Source: Company, Angel Research
July 27, 2018
2
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Outlook and Valuation
We expect MSIL to report net revenue CAGR of ~16% to ~`1,08,317cr over
FY2018-20E mainly due to new launches and upcoming facelift in various models.
Further, on the bottom-line front, we expect CAGR of ~18% to `10,892cr over the
same period on the back of better margins. Thus, we maintain our Buy
recommendation on MSIL with Target Price of `10,820.
Downside risks to our estimates
Strong launches and facelift of existing model from competitors like Hyundai
Motors, M&M, Ford, etc. can grab the market share from MSIL
Slowdown of economy can impact the overall buying sentiment of automobile
segment
Company Background
Maruti Suzuki, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest
passenger car company, accounting for over 45% of the domestic car market. The
company offers 14 brands spanning across car, UV and MPV segments. WagonR,
Swift, DZire, Baleno, Brezza and Ciaz are the most popular models and dominate
the market in their respective segments. It has three manufacturing facilities in
Gurgaon and Manesar with installed capacity of c.1.55mn units. It has the most
extensive distribution network among all PV companies in India.
July 27, 2018
3
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Profit & Loss Statement
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E
FY2020E
Net Sales
57,589
68,085
79,809
92,579
108,317
% chg
13.4
18.2
17.2
16.0
17.0
Total Expenditure
48,700
57,727
67,746
78,322
91,636
Raw Material
38,706
46,742
54,986
64,805
76,039
Personnel
2,000
2,360
2,863
3,333
3,899
Others Expenses
7,994
8,624
9,897
10,184
11,698
EBITDA
8,889
10,358
12,063
14,257
16,681
% chg
16.5
16.5
18.2
17.0
(% of Net Sales)
15.4
15.2
15.1
15.4
15.4
Depreciation& Amortisation
2,822
2,604
2,760
2,917
3,100
EBIT
6,067
7,754
9,304
11,340
13,581
% chg
27.8
20.0
21.9
19.8
(% of Net Sales)
10.5
11.4
11.7
12.2
12.5
Interest & other Charges
82
89
346
92
95
Other Income
1,600
2,462
2,209
2,200
2,300
(% of PBT)
21.1
24.3
19.8
16.4
14.6
Recurring PBT
7,585
10,127
11,167
13,448
15,786
% chg
33.5
10.3
20.4
17.4
Tax
2,088
2,616
3,286
4,034
4,894
(% of PBT)
27.5
25.8
29.4
30.0
31.0
PAT (reported)
5,497
7,511
7,881
9,414
10,892
Extraordinary Items
-
-
-
-
-
ADJ. PAT
5,497
7,511
7,881
9,414
10,892
% chg
36.6
4.9
19.5
15.7
(% of Net Sales)
9.5
11.0
9.9
10.2
10.1
Basic EPS (`)
182.0
248.7
261.0
311.7
360.7
Fully Diluted EPS (`)
182.0
248.7
261.0
311.7
360.7
% chg
44.4
36.6
4.9
19.5
15.7
July 27, 2018
4
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Balance Sheet
Y/E March (` cr)
FY2016
FY2017
FY2018
FY2019E FY2020E
SOURCES OF FUNDS
Equity Share Capital
151
151
151
151
151
Reserves& Surplus
30,465
36,924
42,389
48,782
56,050
Shareholders Funds
30,616
37,075
42,540
48,933
56,201
Total Loans
231
484
484
484
484
Deferred Tax Liability
861
1,110
1,110
1,110
1,110
Total Liabilities
31,722
38,684
44,148
50,542
57,810
APPLICATION OF FUNDS
Gross Block
15,343
18,680
22,086
24,586
27,086
Less: Acc. Depreciation
2,813
5,370
8,129
11,046
14,147
Net Block
12,530
13,311
13,957
13,540
12,940
Capital Work-in-Progress
1,007
1,252
1,252
1,252
1,252
Investments
20,676
29,151
36,123
43,123
50,123
Current Assets
8,513
8,247
7,148
9,323
13,058
Inventories
3,133
3,264
3,160
3,805
4,451
Sundry Debtors
1,323
1,203
1,465
2,029
2,968
Cash
51
24
74
249
765
Loans & Advances
2,303
2,129
439
463
1,625
Other Assets
1,703
1,628
2,010
2,777
3,250
Current liabilities
11,636
13,881
14,936
17,300
20,167
Net Current Assets
(3,122)
(5,634)
(7,788)
(7,977)
(7,109)
Deferred Tax Asset
632
604
604
604
604
Mis. Exp. not written off
-
-
-
-
-
Total Assets
31,722
38,684
44,148
50,542
57,810
July 27, 2018
5
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Consolidated Cashflow Statement
Y/E March (` cr)
FY2016
FY2017
FY2018E FY2019E FY2020E
Profit before tax
7585
10127
11167
13448
15786
Depreciation
2822
2604
2760
2917
3100
Change in Working Capital
1460
2192
2204
365
(353)
Interest / Dividend (Net)
(70)
52
346
92
95
Direct taxes paid
(1912)
(2323)
(3286)
(4034)
(4894)
Others
(1402)
(2370)
0
0
0
Cash Flow from Operations
8483
10282
13191
12788
13735
(Inc.)/ Dec. in Fixed Assets
(2456)
(3236)
(3406)
(2500)
(2500)
(Inc.)/ Dec. in Investments
(4774)
(5937)
(6973)
(7000)
(7000)
Cash Flow from Investing
(7230)
(9173)
(10379)
(9500)
(9500)
Issue of Equity
0
0
0
0
0
Inc./(Dec.) in loans
(235)
253
0
0
0
Dividend Paid (Incl. Tax)
(755)
(1057)
(2416)
(3020)
(3624)
Interest / Dividend (Net)
(239)
(331)
(346)
(92)
(95)
Cash Flow from Financing
(1229)
(1136)
(2762)
(3112)
(3719)
Inc./(Dec.) in Cash
23
(27)
50
176
516
Opening Cash balances
28
51
24
74
249
Closing Cash balances
51
24
74
249
765
July 27, 2018
6
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Key Ratio
Y/E March
FY2016
FY2017
FY2018
FY2019E FY2020E
Valuation Ratio (x)
P/E (on FDEPS)
51.6
37.8
36.0
30.1
26.1
P/CEPS
34.1
28.1
26.7
23.0
20.3
P/BV
9.3
7.7
6.7
5.8
5.0
Dividend yield (%)
0.4
0.8
0.9
1.1
1.3
EV/Sales
4.6
3.7
3.1
2.6
2.2
EV/EBITDA
29.6
24.6
20.6
16.9
14.0
EV / Total Assets
8.3
6.6
5.6
4.8
4.0
Per Share Data (`)
EPS (Basic)
182.0
248.7
261.0
311.7
360.7
EPS (fully diluted)
182.0
248.7
261.0
311.7
360.7
Cash EPS
275.5
334.9
352.3
408.3
463.3
DPS
35.0
75.0
80.0
100.0
120.0
Book Value
1,013.8
1,227.7
1,408.6
1,620.3
1,861.0
Returns (%)
ROCE
19.7
20.6
21.6
22.9
24.0
Angel ROIC (Pre-tax)
59.9
92.5
136.3
187.6
234.3
ROE
18.0
20.3
18.5
19.2
19.4
Turnover ratios (x)
Asset Turnover (Gross Block)
3.8
3.6
3.6
3.8
4.0
Inventory / Sales (days)
20
17
14
15
15
Receivables (days)
8
6
7
8
10
Payables (days)
51
49
45
45
45
Working capital cycle (ex-cash) (days)
(23)
(25)
(24)
(22)
(20)
Source: Company, Angel Research
July 27, 2018
7
Maruti Suzuki India Ltd| 1QFY2019 Result Update
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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public offering of securities of the company covered by Analyst during the past twelve months.
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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 (Returns):
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Reduce (-5% to -15%)
Sell (< -15%)
July 27, 2018
8