Broker’s call: Maruti Suzuki (Buy)

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Target: INR 10,693

CMP: INR 8927.15

In the fourth quarter of fiscal year 2013, Maruti Suzuki India Limited It recorded revenue from operations of Rs.32,059.6 crore, up by 19.8 per cent year-on-year and 10.3 per cent quarter-on-quarter. EBITDA was Rs.3,351.60 crore, up 37.9 per cent YoY and 18.1 per cent QoQ, while EBITDA was Rs.2,670.80 crore, up 42.4 percent year-on-year and 11.7 percent quarter-on-quarter.

EBITDA margins in the fourth quarter of fiscal ’23 were 10.4%, up 130 basis points year-over-year and up 60 basis points quarter-over-quarter. The company delivered strong numbers due to good market response in the UV segment, improved operating profit due to higher sales volume, better than market realization and favorable forex traffic.

MSIL was unable to fully meet market demand due to a shortage of electronic components, resulting in a production loss of 170,000 units recorded for the year. The company has also announced in principle the creation of an additional capacity of up to 1 million vehicles annually to meet the estimated market demand.

We recommend a Buy on MSIL, valuationd at a price target of Rs.10,693 with a P/E multiple of 26 using projected EPS of $414.68 (FY25). MSIL’s ambition to capture the highest market share in the SUV segment will drive growth in the coming years.