CMP 1688.80

Target Price 1849.00

ISIN: INE585B01010

APRIL 29th

, 2013

MARUTI SUZUKI INDIA LTD. Result Update: Q4 FY13

BUYBUYBUYBUY

Stock Data

Sector Automobile

BSE Code 532500

Face Value 5.00

52wk. High / Low (Rs.) 1703.40/1052.00

Volume (2wk. Avg ) 137000

Market Cap ( Rs in mn ) 510152.70

Annual Estimated Results (A*: Actual / E*: Estimated)

Years FY13A FY14E FY15E

Net Sales 435879.30 498645.92 553496.97

EBITDA 50420.50 63665.27 74567.57

Net Profit 23921.30 30406.50 35563.08

EPS 79.19 100.66 117.73

P/E 21.33 16.78 14.35

Shareholding Pattern (%)

1 Year Comparative Graph

BSE SENSEX MARUTI SUZUKI INDIA LTD.

SYNOPSIS

Maruti Suzuki is India’s largest passenger vehicle

company with a market share close to 40% which

offers 14 models with over 200 variants across

the Industry segments like: Passenger cars, Utility

vehicles and Vans.

The Company has posted a net profit of Rs.

12396.20 million for the quarter ended Mar. 31,

2013 as compared to Rs. 6398.40 million for the

quarter ended Mar. 31, 2012.

Total Income has increased from Rs. 364139.50

million for the quarter ended March 31, 2013 to

Rs. 444003.00 million for the quarter ended

March 31, 2012.

Maruti Suzuki India Ltd sold a total of 119,937

units in March 2013.This includes 12,047 units of

exports.

Maruti Suzuki Ltd recommended a dividend of

160 per cent (Rs 8/- per share of face value Rs.

5/) for 2012-13.

Maruti Suzuki India Limited unveiled the SX4 in

an all new form including fresh look exteriors &

interiors, enhanced performance, and more

convenience.

Net Sales and Operating Profit of the company are

expected to grow at a CAGR of 16% and 30% over

2012 to 2015E respectively.

Maruti Suzuki’s bestseller Swift Dzire and Ertiga

have been awarded the prestigious India Design

Mark: Good Design Award.

Peer Groups CMP Market Cap EPS P/E (x) P/BV(x) Dividend

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Maruti Suzuki India Ltd 1688.80 510152.70 79.19 21.33 2.75 150.00

Mahindra & Mahindra Ltd 898.90 552582.70 54.37 16.55 4.56 250.00

Force Motors Ltd 384.00 5059.70 634.51 0.61 0.44 100.00

Tata Motors Ltd 294.45 938691.60 3.70 79.53 4.85 200.00

Investment Highlights STANDALONE

Results updates- Q4 FY13,

Maruti Suzuki is India’s largest passenger vehicle

company with a market share close to 40% which

offers 14 models with over 200 variants across the

Industry segments like: Passenger cars, Utility

vehicles and Vans, reported its financial results for

the quarter ended 31 MAR, 2013.

Months MAR-13 MAR-12 % Change

Net Sales 133040.10 117270.10 13.45%

PAT 12396.20 6398.40 93.74%

EPS 41.04 22.15 85.30%

EBITDA 23986.00 11553.50 107.61%

The company’s net profit jumps to Rs.12396.20 million against Rs.6398.40 million in the corresponding quarter

ending of previous year, an increase of 93.74%. Revenue for the quarter rose 13.45% to Rs.133040.10 million

from Rs.117270.10 million, when compared with the prior year period. Reported earnings per share of the

company stood at Rs.41.04 a share during the quarter, registering 85.30% increase over previous year period.

Profit before interest, depreciation and tax is Rs.23986.00 millions as against Rs.11553.50 millions in the

corresponding period of the previous year.

Expenditure :

Break up of Expenditure

Rs. Millions

Q4 FY13 Q4 FY12

Cost of Material consumed 82257.30 88741.00

Depreciation 8158.90 3305.70

Employees Benefit Expenses 3874.50 2457.80

Other Expenditure 21874.20 12899.20

Purchase of Traded Goods 4403.50 4125.40

Latest Updates

� The Company has posted a net profit of Rs. 12396.20 million for the quarter ended Mar. 31, 2013 as

compared to Rs. 6398.40 million for the quarter ended Mar. 31, 2012. The increase in Net Profit during the

quarter was on account of higher sales of new models such as Ertiga, DZire and Swift, cost reduction and

localization efforts and the benefit of a favorable exchange rate.

� Total Income has increased from Rs. 364139.50 million for the quarter ended March 31, 2013 to Rs.

444003.00 million for the quarter ended March 31, 2012.

� Maruti Suzuki India Ltd has recommended a final dividend aggregating Rs. 24,167 lacs i.e. Rs. 8 per share

(Nominal value Rs. 5.00 per share) (Previous Year Rs. 21,668 lacs i.e. Rs. 7.5 per share) for the financial year

2012-13.

� Financial Year 2012-13

During the year, the Company posted Net Sales (net of excise) of Rs. 426,125 million. Excluding the effect of

the SPIL merger, Net Sales stood at Rs. 421,229 million an increase of 21.3 per cent over the comparable

figure for the previous year.

� Maruti Suzuki India Ltd sold a total of 119,937 units in March 2013.This includes 12,047 units of exports.

� Maruti Suzuki India Limited unveiled the SX4 in an all new form including fresh look exteriors and interiors,

enhanced performance, and more convenience. The all new SX4 delivers an improved fuel efficiency of 6 per

cent @ 16.51kmpl in petrol. The Super Turbo Diesel SX4 delivers 21.79 kmpl. The CNG option returns a fuel

efficiency of 22.1 km/kg.

� Maruti Suzuki India Ltd has approved the amalgamation of the following seven wholly owned subsidiaries of

Maruti Suzuki India Ltd with and into the Company:

� Maruti Insurance Business Agency Limited

� Maruti Insurance Agency Services Limited

� Maruti Insurance Distribution Services Limited

� Maruti Insurance Agency Logistics Limited

� Maruti Insurance Agency Solutions Limited

� Maruti Insurance Agency Network Limited

� Maruti Insurance Broker Limited

Company Profile

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki Motor

Corporation, Japan. Maruti Suzuki has been the leader of the Indian car market for over two and a half decades.

The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both

the facilities have a combined capability to produce over a 1.5 million (1,500,000) vehicles annually. The

company plans to expand its manufacturing capacity to 1.75 million by 2013.

Products: CARS

The Company offers 15 brands and over 150 variants ranging from people's car Maruti 800 to the latest Life

Utility Vehicle, Ertiga. The portfolio includes Maruti 800, Alto, Alto K10, A-star, Estilo, WagonR, Ritz, Swift,

Swift DZire, SX4, Omni, Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative,

in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models across vehicle segments. These

include Eeco, Alto, Estilo, Wagon R and Sx4. With this Maruti Suzuki became the first company in India to

introduce factory fitted CNG vehicles.

Plants

5 plants in the Gurgaon and Manesar areas of Haryana equip Maruti Suzuki with a production capability of 1.55

million units per annum.

Passenger Cars

Vans

Utility Vehicles

Financial Highlight STANDALONE

Balance sheet as at March31, 2012

(A*- Actual, E* -Estimations & Rs. In Millions)

FY12 FY13 FY14E FY15E

EQUITY AND LIABILITIES:

Shareholders’ Funds:

Share Capital 1445.00 1510.40 1510.40 1510.40

Reserves and Surplus 150429.00 184279.30 214685.80 250248.87

Net worth (a) 151874.00 185789.70 216196.20 251759.27

Non-Current Liabilities:

Long-term borrowings 0.00 5429.20 7057.96 8469.55

Deferred Tax Liabilities [Net] 3023.00 4086.90 5353.84 6799.38

Other Long Term Liabilities 966.00 1036.10 1087.91 1136.86

Long Term Provisions 1683.00 2259.00 2620.44 2961.10

Long term liabilities (b) 5672.00 12811.20 16120.14 19366.89

Current Liabilities:

Short-term borrowings 10783.00 8462.60 6770.08 5619.17

Trade Payables 33499.00 41673.70 50425.18 57988.95

Other Current Liabilities 15892.00 11660.80 9095.42 6912.52

Short Term Provisions 5302.00 6482.30 7778.76 8945.57

Current Liabilities © 65476.00 68279.40 74069.44 79466.22

Total (a+b+c) 223022.00 266880.30 306385.78 350592.37

ASSETS:

Non-Current Assets:

Fixed Assets 81321.00 117413.60 143924.12 172708.94

(d) 81321.00 117413.60 143924.12 172708.94

Other non-current assets 263.00 8946.40 9393.72 9863.41

Non Current Investments 13933.00 18484.50 22920.78 26931.92

Long Term Loans and Advances 16715.00 12787.10 10229.68 8183.74

(e) 30911.00 40218.00 42544.18 44979.07

Current Assets:

Current Investments 47541.00 52298.40 56482.27 61000.85

Inventories 17965.00 18407.40 18775.55 19151.06

Trade Receivables 9376.00 14236.80 17796.00 21355.20

Cash and Bank Balances 24361.00 7749.70 5347.29 3850.05

Short Term Loans and Advances 7783.00 11153.40 14276.35 18273.73

Other Current Assets 3764.00 5403.00 7240.02 9273.47

(f) 110790.00 109248.70 119917.49 132904.36

Total (d+e+f) 223022.00 266880.30 306385.78 350592.37

Annual Profit & Loss Statement for the period of 2012 to 2015E

Value(Rs.in.mn) FY12 FY13E FY14E FY15E

Description 12m 12m 12m 12m

Net Sales 355870.90 435879.30 498645.92 553496.97

Other Income 8268.60 8123.70 8814.21 9254.93

Total Income 364139.50 444003.00 507460.13 562751.90

Expenditure -330742.00 -393582.50 -443794.87 -488184.33

Operating Profit 33397.50 50420.50 63665.27 74567.57

Interest -552.10 -1898.20 -2410.71 -2977.23

Gross profit 32845.40 48522.30 61254.55 71590.34

Depreciation -11383.50 -18611.70 -22520.16 -26573.79

Profit Before Tax 21461.90 29910.60 38734.39 45016.55

Tax -5110.50 -5989.30 -8327.89 -9453.48

Net Profit 16351.40 23921.30 30406.50 35563.08

Equity capital 1444.60 1510.40 1510.40 1510.40

Reserves 150429.00 184279.30 214685.80 250248.87

Face value 5.00 5.00 5.00 5.00

EPS 56.59 79.19 100.66 117.73

Quarterly Profit & Loss Statement for the period of 30 Sep, 2012 to 30 June, 2013E

Value(Rs.in.mn) 30-Sep-12 31-Dec-12 31-Mar-13 30-June-13E

Description 3m 3m 3m 3m

Net sales 83054.30 112003.40 133040.10 126388.10

Other income 1563.20 1886.20 3989.90 4189.40

Total Income 84617.50 113889.60 137030.00 130577.49

Expenditure -77968.80 -103090.70 -113044.00 -108440.99

Operating profit 6648.70 10798.90 23986.00 22136.50

Interest -380.10 -459.30 -726.40 -958.85

Gross profit 6268.60 10339.60 23259.60 21177.66

Depreciation -3470.40 -3583.30 -8158.90 -8566.85

Profit Before Tax 2798.20 6756.30 15100.70 12610.81

Tax -523.70 -1743.40 -2704.50 -2635.66

Net Profit 2274.50 5012.90 12396.20 9975.15

Equity capital 1444.60 1444.60 1510.40 1510.40

Face value 5.00 5.00 5.00 5.00

EPS 7.87 17.35 41.04 33.02

Ratio Analysis

Particulars FY12 FY13 FY14E FY15E

EPS (Rs.) 56.59 79.19 100.66 117.73

EBITDA Margin (%) 9.38% 11.57% 12.77% 13.47%

PBT Margin (%) 6.03% 6.86% 7.77% 8.13%

PAT Margin (%) 4.59% 5.49% 6.10% 6.43%

P/E Ratio (x) 29.84 21.33 16.78 14.35

ROE (%) 10.77% 12.88% 14.06% 14.13%

ROCE (%) 28.90% 35.12% 37.88% 38.36%

EV/EBITDA (x) 14.61 10.12 8.01 6.84

Book Value (Rs.) 525.66 615.03 715.69 833.42

P/BV 3.21 2.75 2.36 2.03

Charts

Outlook and Conclusion

� At the current market price of Rs.1688.80, the stock P/E ratio is at 16.78 x FY14E and 14.35 x FY15E

respectively.

� Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.100.66 and

Rs.117.73 respectively.

� Net Sales and Operating Profit of the company are expected to grow at a CAGR of 16% and 30% over 2012 to

2015E respectively.

� On the basis of EV/EBITDA, the stock trades at 8.01 x for FY14E and 6.84 x for FY15E.

� Price to Book Value of the stock is expected to be at 2.35 x and 2.03 x respectively for FY14E and FY15E.

� We recommend ‘BUY’ in this particular scrip with a target price of Rs.1849.00 for Medium to Long term

investment.

Industry Overview

The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy. India is being deemed

as one of the world's fastest growing passenger car markets and second largest two wheeler manufacturer. It is

also home for the largest motor cycle manufacturer and the fifth largest commercial vehicle manufacturer.

India is expected to become the third largest automobile market in the world. Ford is looking at India as a major

export hub, as per Mr. Joginder Singh, President and Managing Director, Ford India.

By 2020, the luxury car segment is estimated to be around three per cent of the overall passenger car market in

India. So, there is huge opportunity for growth. India is going to be one of the biggest markets for us, worldwide,

according to Tomas Ernberg, Managing Director, Volvo Auto India.

India is the largest base to export compact cars to Europe. Moreover, hybrid and electronic vehicles are new

developments on the automobile canvas and India is one of the key markets for them. Global and Indian

manufacturers are focusing their efforts to develop innovative products, technologies and supply chains.

Key Statistics

The amount of cumulative foreign direct investment (FDI) inflow into the automobile industry during April 2000

to November 2012 was worth US$ 7,518 million, amounting to 4 per cent of the total FDI inflows (in terms of

US$), as per data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.

India's scooter and motorcycle manufacturers have registered 4 per cent growth during April-November 2012,

according to the recent data released by the Society of Indian Automobile Manufacturers (SIAM). Moreover, the

passenger vehicles segment grew at 9.71 per cent during April-June 2012, while overall commercial vehicle

segment registered an expansion of 6.06 per cent year-on-year (y-o-y).

The Indian small and light commercial vehicle segment is expected to more than double by 2015-16 and to grow

at 18.5 per cent compound annual growth rate (CAGR) for the next five years, according to a report titled,

'Strategic Assessment of Small and Light Commercial Vehicles Market in India' by Frost & Sullivan.

Major Developments & Investments

• Volvo Group plans to invest Rs 3,800 crore (US$ 710.28 million) in India over the next few years. Of this, Rs

1,800 crore (US$ 336.45 million) would be invested in its joint venture (JV) with Eicher Motors. Volvo also

aims to export about 30 per cent of the capacity at its Indian engine plant it plans to open in Pithampur,

Madhya Pradesh in 2013, as it looks to leverage costs from India operations

• Honda Car India, the wholly-owned subsidiary of Honda Motor Co, plans to set up a greenfield diesel engine

factory at its second industrial location in Rajasthan

• Jaguar Land Rover (JLR) will incur capital expenditure worth US$ 3.26 billion per year over the medium term

mainly for product development, according to Crisil. In addition, Tata Motors has started assembling the

Jaguar XF at its new facility in Chakan near Pune, Maharashtra

• The research and development (R&D) team of Fiat India will assist Chrysler to design and develop the

smallest Jeep, to be launched globally by mid-2014. The Italian company has also commissioned an R&D set-

up, Chrysler India Automotive Pvt Ltd, in Chennai

• Hero MotoCorp has started construction of its fourth manufacturing plant and a new Global Parts Centre

(GPC) at Neemrana, Rajasthan. The project will attract an investment of Rs 550 crore (US$ 102.80 million)

and both facilities are expected to be operational by FY 2013-14

• Mahindra & Mahindra (M&M) plans to invest US$ 900 million over the next four years in SsangYong Motor

for developing three new vehicles and six engines. The investment would be from internal accruals, fresh

equity and debt, as per Mr Pawan Goenka, President (Automotive & Farm Equipment sectors), M&M. The

firm plans to buy Navistar's 49 per cent stake in the truck and engine making joint ventures (JV) - Mahindra

Navistar Automotives Ltd and Mahindra Navistar Engines Pvt Ltd - for about US$ 31.95 million

• Luxury carmakers like BMW, Audi are planning more 'Made in India' products to increase the number of

offerings in the sub Rs 2.5 million (US$ 46,729) category to expand market. The luxury carmakers are

planning to tap the younger customers with lower price points

• VE Commercial Vehicles Ltd (VECV), a joint venture between Sweden's Volvo Group and homegrown Eicher

Motors, will invest Rs 1,200 crore (US$ 224.30 million) by 2014 for expanding production capacity and

developing new products

• Luxury car brands in India have registered a growth of 12.5 per cent during January-November 2012 period.

The luxury car market in India is expected to reach 150,000 units by 2020, as per Mr Tomas Ernberg,

Managing Director (MD), Volvo Auto India

Government Initiatives

The Government of India (GoI) plans to introduce fuel-efficiency ratings for automobiles to encourage sale of cars

that consume less petrol or diesel, as per Mr Veerappa Moily, Union Minister for Petroleum and Natural Gas.

The GoI plans to push the supply of vehicles powered by electricity over the next eight years. It is expected that

there will be a demand of 5-7 million electricity-operated vehicles by 2020.

The GoI allows 100 per cent foreign direct investment (FDI) in the automotive industry through automatic route.

The Automotive Mission Plan (AMP) 2006-2016 aims at doubling the contribution of automotive sector in gross

domestic product (GDP) by taking the turnover to US$ 145 billion in 2016 with special emphasis on export of

small cars, multi-utility vehicles (MUVs), two & three wheelers and auto components.

Road Ahead

The rapid improvement in infrastructure, huge domestic market, increasing purchasing power, established

financial market and stable corporate governance framework have made the country a favourable destination for

investment by global majors in the auto industry, as per Automotive Mission Plan (AMP) (2006-16).

Additionally, the introduction of alternative fuels like hydrogen and bio fuels needs to be promoted to ensure

sustainability of the industry over the long term.

The vision of AMP 2006-2016 aims India "to emerge as the destination of choice in the world for design and

manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for

more than 10 per cent of the GDP and providing additional employment to 25 million people by 2016."

In addition, the US-based car major, Ford aims to make India its export hub and plans to sell its products in more

than 50 countries over a period of time. The company has committed a total investment of US$ 2 billion in India

so far (November 2012).

The luxury car market of India is set for growth over the medium and long term, according to Mr Philipp Von

Sahr, President, BMW Group India. The market is about 30,000 cars a year and is rising steadily, added Mr Sahr.

Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale

of any financial instrument or as an official confirmation of any transaction. The information contained herein is

from publicly available data or other sources believed to be reliable but do not represent that it is accurate or

complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall

not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the

information contained in this report. This document is provide for assistance only and is not intended to be and must

not alone be taken as the basis for an investment decision.

Firstcall India Equity Research: Email – info@firstcallindia.com

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