For 3QFY2019, Maruti Suzuki India (MSIL) posted below expectation results both
on top-line and bottom-line fronts. MSIL reported ~2% yoy top-line growth to `19,668cr on the back of price hike (up ~2% yoy). The company’s operating margins contracted by 594bps yoy. On the bottom-line front, MSIL reported degrowth of ~17% yoy to `1,489cr on the back of lower sales and poor operating
performance.
We expect MSIL to report net revenue CAGR of ~9% to ~`94,790cr over FY2018-20E mainly due to new launches and upcoming facelift
in various models. Further, on the bottom-line front, we expect CAGR of ~6% to
`8,670cr over the same period on the back of healthy sales. Thus, we maintain our Buy recommendation on MSIL with Target Price of `8,552.
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