Motilal Oswal Financial Services

6 August 2018

Annual Report Update | Sector: Automobiles

BSE SENSEX

37,692

S&P CNX

11,387

Maruti Suzuki

Buy

CMP: INR9,287

TP: INR10,805(+16%)

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Preparing to stay ahead in the race

Initiatives on EV, network expansion/transformation and cost to help sustain its lead

We delved into Maruti Suzuki’s (MSIL) FY18 annual report to get insights into: (a) the

demand environment and outlook, (b) the initiatives to strengthen its network moat, (c)

the strategy to comply with future regulatory norms and (d) Gujarat plant cost structure.

Key highlights:



MSIL expects double-digit growth in FY19, driven by continued strength in the rural

markets.



The company remains fully committed to launch a full electric vehicle (EV) in India in

2020, supported by access to technology from Toyota. In the interim, it will launch a

strong hybrid vehicle.



MSIL is at various stages of preparedness for the upcoming regulatory norms like

crash test and corporate average fuel economy (CAFE). While nine of its models

already comply with crash test norms, it is preparing for CAFE phase-2 norms

(applicable from Apr-22) after complying with phase-1.



The company continues expanding its network, adding ~315 sales outlets in FY18. It

now has ~2,627 outlets in 1,735 cities. Also, MSIL is at various stages of acquiring

land at ~370 locations in top 10 cities.



It is taking several initiatives to reduce JPY exposure, including development of a

local source for high tensile steel and enhanced procurement from the Japanese

suppliers’ transplants in the ASEAN region.

Stock Info

Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Free float (%)

MSIL IN

302

2805.5 / 40.7

10000 / 7378

-6/-7/3

4404

Demand: Strong demand in rural, striving for double-digit growth in FY19

43.8



The top 10 cities showed weak demand in FY18. Non-urban markets saw

Financials Snapshot (INR b)

Y/E Mar

2018 2019E 2020E

797.6 921.1 1,080.8

Net Sales

123.1 141.2 171.8

EBITDA

79.0

92.2 121.7

PAT

Cons. EPS (INR) 266.7 311.2 409.2

7.3

16.7

31.5

Gr. (%)

1,382 1,567 1,820

BV/Sh (INR)

18.5

19.5

22.1

RoE (%)

27.3

27.2

30.7

RoCE (%)

34.8

29.8

22.7

P/E (x)

6.7

5.9

5.1

P/BV (x)

Shareholding pattern (%)

Jun-18 Mar-18 Jun-17

As On

Promoter

56.2

DII

12.7

11.5

11.8

FII

23.7

25.2

25.0

Others

7.4

7.2

7.0

FII Includes depository receipts



healthy growth. MSIL continued outperforming the industry for the sixth

straight year.

MSIL’s petrol segment grew by ~16.8% and diesel segment by ~7%. Diesel’s

contribution for MSIL stood at ~29.8% in FY18 (v/s 31.5% in FY17), as against

39.9% for the industry (v/s 40.5% in FY17).

The company is striving to post double-digit growth for the fifth consecutive

year in the domestic market.

Until the second plant at Gujarat becomes operational, it is taking steps to

overcome any capacity challenges.

Finance penetration is highest ever at 80.5% (v/s 74% in FY14).

Consumer surveys show that 'style and looks' has emerged among the main

reasons for buying the company’s products. This is in addition to MSIL’s other

competitive advantages of high value, a vast network and relevant technology.

With 75% of cars sold in India being below 4 meters in length and costing

under INR0.65m (ex-factory), mass electrification of vehicles in the country has

to be considered in terms of affordability and pan-India charging infrastructure.

MSIL is fully committed to launch a full EV in India in 2020, supported by access

to technology from Toyota.

Electric vehicles: Challenge in affordably electrifying small car



Jinesh Gandhi – Research analyst

(Jinesh@MotilalOswal.com); +91 22 3982 5416

Research analyst: Deep Shah

(Deep.S@MotilalOswal.com); +91 22 6129 1533 |

Suneeta Kamath

(Suneeta.Kamath@MotilalOswal.com); +91 22 6129 1534

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Maruti Suzuki

Stock Performance (1-year)



It is now working on a strong hybrid vehicle, which will use a combination of a

conventional engine and an electric motor to power the wheels, drawing energy

from petroleum fuels and a Li-ion battery. It will perform various functions such

as idle stop, torque assist and regenerative braking.

For the upcoming crash test norms, MSIL’s nine models (Vitara Brezza, Ignis,

Baleno, Ertiga, Ciaz, S-Cross, Swift, Dzire and Celerio) are already certified as

compliant with offset frontal, side impact and pedestrian crash norms well

ahead of the timeline.

This apart, MSIL is currently meeting phase-1 of CAFE norms (Apr-17) and

gearing up to meet phase-2 (Apr-22) norms by adopting new and advanced

technologies.

Getting ready to meet future regulatory norms



Network expansion – further strengthening its moat



In FY18, MSIL added 315 sales outlets (to ~2,627 outlets in 1,735 cities),

including 150 sales outlets of the commercial channel. In addition, 203 service

workshops were added to the network.

During the year, the company introduced NEXA Service workshops, setting a

new benchmark for car service in India.

Its strategy to build a landbank for network expansion progressed further in

FY18 – it worked on the acquisition of ~370 locations, the process for which is at

various stages. A substantial part of these land parcels is in the top 10 cities.

Going forward, the focus will be on acquiring land in emerging cities. A large

part of the acquired land will be used for setting up smaller service workshops

to have a larger footprint.

Recognizing the changes in consumer lifestyles, including the growing

importance of mobile technologies and digitization, MSIL has undertaken a

major transformation of its network in recent years.

Further building up on the success of NEXA in 2015 (which helped attract new

categories of customers), MSIL began upgrading its existing channel under the

brand ARENA in FY18.

The intent is to holistically transform the traditional dealership format with the

new format at scale. A total of 51 ARENA outlets were added to the network in

FY18. Progressively, the existing showrooms across India will focus on extending

the ARENA experience to customers.

During the year, MSIL introduced 154 independent True Value outlets, spanning

across 109 cities. The company will continue expanding the True Value network.

On pre-owned cars network, it undertook a major initiative to improve buyer

experience. Online listing of individual cars with details, spacious showrooms,

and digital evaluation of vehicles now offer enhanced customer convenience

and better transparency.

On collaboration with Toyota:

This collaboration is likely to benefit the

company immensely by providing access to new technologies. Also, MSIL is likely

to benefit from mutual supply of vehicles, which will help expand its portfolio

Network transformation with a focus on enhanced customer experience



Other highlights



6 August 2018

Maruti Suzuki



into new segments. This arrangement will create a win-win situation for both

the companies.

New capacity:

The second line at Gujarat will be commissioned early in 2019.

Work has started on the third line, and commissioning is expected by early

2020. MSIL expects to reach the 2 million mark in the next financial year, and

the next goal is 3 million cars a year by 2025.

Royalty:

A new royalty formula was signed by MSIL and Suzuki recently. The

percentage of royalty will now reflect the rising volumes of sales in India and

lead to lower cost of production. The growing capability of MSIL’s engineering

department to design vehicles will also lead to the same result.

Focus on tier-II vendors to improve quality:

Considering critical bearing of tier-II

suppliers on quality, MSIL started evaluation and classification of all tier-II

vendors in FY18 to ensure that only the best are engaged in future

development. Over 90% of the tier-II vendors have been evaluated and assigned

a classification so far.

Some observations on cost



R&D costs (incl. capitalized) grew ~30% to ~INR8.3b (1% of sales).

Initiatives on reducing JPY exposure



MSIL is working with the Indian steel makers for the development of local

high tensile and galvanized steel material to improve indigenization.



Enhanced procurement from the Japanese suppliers’ transplants in the

ASEAN region is expected to reduce its exposure to the JPY.

Usage of rail for vehicle dispatches increased in FY18, with the addition of more

rakes and destinations. Two new terminals – one each in Hyderabad and

Ahmedabad – were customized to handle auto-wagon rakes. In all, six

destinations are being served through Railways. In FY18, there was a 25%

increase in vehicles dispatched by rail. A railway station near the plant of Suzuki

Motor Gujarat is being customized for rail dispatches from the plant.

Valuation view:

We remain positive on MSIL, considering its (a) multi-year favorable

product lifecycle, (b) improvement in product mix (increasing share of premium

products), aiding realizations and consequently margins, (c) reducing JPY exposure,

(d) lower capex intensity, (e) improvement in FCF conversion and (f) sharp

improvement in RoIC. We expect continued strong earnings growth for MSIL, driven

by higher volumes and margins. We value MSIL at 25x Mar’20E core EPS, based on

the two-stage dividend discount model (refer Exhibit 10), which imply ~35%

premium to 5-year/10-year averages, to factor in a further improvement in MSIL’s

positioning. The stock trades at 29.8x/22.7x FY19E/20E EPS. Maintain

Buy

with a

target price of INR10,805 (~25x Jun-20E EPS).

6 August 2018

Maruti Suzuki

Exhibit 1: Industry fuel mix stabilizing in FY18 (%)

Petrol

Diesel

Exhibit 2: MSIL finance penetration inching up

% of domestic sales

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY12

FY13

FY14

FY15

FY16

FY17

FY18

Source: Company, MOSL

Exhibit 3: MSIL added 315 sales outlets, including ~150 outlets for CVs, taking total sales outlets to 2,627 covering 1,735 cities

Existing Dealer (Ex Nexa)

Nexa

Commercial

Dealer - Cities Covered

1,290

668

933

FY11

801

874

980

1,471

127

1,652

252

1,735

190

316

555

802

FY10

1,100

FY12

1,204

FY13

1,310

1,619

1,820

2,020

2,121

FY14

FY15

FY16

FY17

FY18

Source: Company, MOSL

Exhibit 4: Service network expansion continues…

Service Outlets

Serivce - Cities Covered

1,659

1,570

1,506

Exhibit 5: …so is for pre-owned car network

TrueValue Outlets

1,184

867

600

409

450

1,007

1,243

1,408

1,423

1,445

1,471

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY12

FY13

FY14

FY15

FY16

FY17

FY18

Source: Company, MOSL

6 August 2018

Maruti Suzuki

Exhibit 7: Alternative fuel vehicles (CNG, LPG, hybrids) drive

a reduction in CO2 emission

Cum. tCO2 reduction due to Alt vehicles

Cum. Sales of Alt Fuel vehicles ('000 units)

1000000

1.3

1.0 0.9 1.0

800000

600000

400000

200000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Source: Company, MOSL

62 113

260

168 219

322

382

437

502

604

763

923

Exhibit 6: R&D investment increased ~30%

R&D (incl Capitalized)

1.5

1.1 1.0

0.4

0.5

0.4

0.6

1.2

R&D (% of Sales)

Exhibit 8: ISO 14001 certification status of supplier plants

472

436

400

352

Exhibit 9: Increasing dependence on contract workforce to

mitigate any volatility

Total Manpower

51.5

Contract Manpower as % of Total Manpower 56.7

51.7

50.2

47.3

43.1

38.0

FY15

FY16

FY17

FY18

Source: Company, MOSL

Exhibit 10: We arrive at a target P/E of 25x based on a two-stage dividend discount model

Payout ratio

Cost of Equity (k)

Growth (g)

No. of years (n)

Numerator

Denominator

Equation (Num/Den)

Derived PE (x)

High Growth stage

(Stage 1 - 10 yrs)

38.0%

12.8%

15.0%

10.0

-0.093

-0.022

4.2

Low Growth Stage

(Stage 2)

60.0%

11.8%

8.0%

2.622

0.127

20.7

Source: MOSL

6 August 2018

Maruti Suzuki

Exhibit 11: Paradigm shift in every operating parameter

Parameters

New Entrants (# of players)

Market share (%)

Rural contribution (%)

Contribution from premium segment

Gross Margins (%)

EBITDA Margins (%)

Net JPY Exposure (% of sales)

R&D (% of sales)

Capex (% of sales)

FCF conversion (FCF as % of PAT)

RoE (%)

Dividend Payout (%)

1 year forward PE (x)

2010-16

11.5

18.6

2017-22

45-48

38-40

30-32

16-17.5

1.5-2

~75

20-25

Exhibit 12: Despite superior positioning as against consumer durable companies, MSIL

trades at 25-50% discount

Voltas Whirlpool

Category

Category Penetration (% of Population)

Category Growth 5 yrs (FY11-16, CAGR %)

Market Share (%) *

Level of consolidation (Sh. of Top-5 players) *

Gross Fixed Asset Turnover (x)

Working cap cycle (Days)

ROIC

ROCE

ROE

Valuation

FCF Yield

A/C

30.0

2.8

Fridge

3.5

-1

35.3

2.2

Crompton

Havells Maruti

Consumer

Fans

1.9

-2

-15

-60

106

47.0

3.9

50.0

3.0

22.7

3.1

* Including unorganized Source: MOSL, Company

Exhibit 13: MSIL 1-year forward P/E (x) at premium to LPA

35.0

30.0

25.0

20.0

15.0

10.0

5.0

12.7

6.6

18.0

23.4

P/E (x)

Min (x)

Avg (x)

+1SD

Max (x)

-1SD

Exhibit 14: MSIL 1-year forward P/B (x) at premium to LPA

7.5

6.2

P/B (x)

Min (x)

Avg (x)

+1SD

6.4

4.3

3.1

1.9

1.3

Max (x)

-1SD

32.4

27.0

4.9

3.6

2.3

1.0

5.6

Source: MOSL

6 August 2018

Maruti Suzuki

Exhibit 15: Comparative valuation

Auto OEM's

Bajaj Auto

Hero MotoCorp

TVS Motor

M&M

Maruti Suzuki

Tata Motors

Ashok Leyland

Eicher Motors

Escorts

Auto Ancillaries

Bharat Forge

Exide Industries

Amara Raja Batteries

BOSCH

Endurance Tech

Motherson Sumi

CEAT

CMP Rating

P/E (x)

(INR)*

(INR) FY19E FY20E

2,688 Buy

3,223

17.5

15.4

3,297 Neutral 3,446

17.0

15.1

528 Neutral

572

29.7

20.5

933 Buy

1,063

18.6

17.0

9,287 Buy

10,805

29.8

22.7

255 Buy

360

8.5

6.7

118 Buy

149

17.8

13.6

27,054 Buy

34,264

27.4

21.0

882 Neutral

988

16.8

13.4

647 Buy

755

277 Buy

314

829 Buy

945

18,932 Neutral 19,017

1,526 Buy

1,483

314 Buy

417

1,381 Buy

1,588

27.1

26.2

26.0

32.7

41.6

27.2

18.1

21.4

21.6

21.9

26.9

30.9

18.8

13.9

EV/EBITDA (x)

FY19E FY20E

12.0

10.1

10.0

8.9

17.5

12.7

14.9

13.3

17.4

14.3

2.8

2.1

8.9

5.9

22.2

18.1

13.7

10.6

15.4

14.6

13.5

20.8

19.5

9.9

10.5

12.8

12.1

11.2

16.9

15.4

6.9

8.0

RoE (%)

FY19E FY20E

22.1

22.6

31.1

31.5

26.5

30.9

14.9

19.5

22.1

10.1

11.5

25.1

27.7

33.2

19.3

20.4

22.0

14.9

17.2

16.8

21.7

23.9

11.2

23.4

16.0

17.7

18.4

24.7

28.7

13.2

Div Yield (%)

FY19E FY20E

2.2

2.6

3.2

3.5

0.8

0.9

1.1

1.3

0.1

1.9

2.1

0.6

0.7

0.6

0.8

0.9

0.6

1.0

0.4

0.9

0.6

1.0

1.2

0.7

1.3

0.8

1.4

0.8

EPS CAGR (%)

FY18-20E

7.4

8.8

36.0

15.5

23.9

29.1

26.9

27.0

29.1

30.7

25.2

17.1

22.4

30.4

43.0

24.6

Source: MOSL

6 August 2018

Maruti Suzuki

Story in charts: Expect EPS CAGR of ~24% over FY18-20

Exhibit 16: Market share gains continues in most segments

FY13

Mini

Compact

Compact-

Sedan

Mid-Size

UV1

Domestic

75.4

34.2

80.6

2.7

27.4

39.4

FY14

76.7

37.6

63.8

2.2

21.1

42.1

FY15

81.4

43.1

53.7

15.4

21.4

45.0

FY16

79.8

42.0

58.1

25.2

25.6

46.8

FY17

67.8

46.2

54.8

32.8

38.2

47.4

FY18

71.3

52.2

61.8

30.0

38.8

50.0

(10.8)

FY12

FY13

FY14

FY15

FY16

FY17

FY18 FY19E FY20E

3.3

(1.4)

Exhibit 17: Expect ~13% volume CAGR (FY18-20) led by

ramp-up in Gujarat plant and product refreshes

Total volumes ('000 units)

11.9

10.6

Growth (%)

14.1

13.4

12.3

9.8

Source: Company, MOSL

Exhibit 18: MSIL to operate at peak utilization

Capacity ('000 units)

104

109

102

90 93

Cap. Util (%) - RHS

102 103

95 98 94

Exhibit 19: Mix to improve in favor of premium products

over the next couple of years

Upto 400k

Price 600-800k

Price 400-600k

Price 800k and above

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19EFY20E

Source: Company, MOSL

Exhibit 20: INR-based royalty to reduce gradually

Royalty in JPY(% of sales)

Royalty in INR(% of sales)

0.5

0.7

2.0

5.1

5.6

5.7

5.3

5.6

5.2

4.6

2.8

FY12

FY13

FY14

FY15

FY16

FY17

2.0

2.4

Exhibit 21: Discounts to moderate over next two years

Discounts (INR/Car)

4.0

4.5

3.2

as a % of Realizations

5.0 4.7

3.3 3.3

3.8

3.9 3.5

3.0 2.8

FY18 FY19E FY20E

Source: Company, MOSL

6 August 2018

Maruti Suzuki

Exhibit 22: Fixed cost as % of sales

Fixed Cost as % Sales

7.7%

8.6% 8.6%

9.7%

9.1%

9.3% 8.8% 8.4%

13.3

9.7

7.1

9.7

Exhibit 23: EBITDA margins and EBITDA per car

EBITDA (INR '000/car)

13.4

EBITDA Margins (%)

15.4 15.2 15.4 15.3 15.9

5.5% 5.5%

7.1%

11.8

Source: Company, MOSL

Exhibit 24: EPS (INR) and growth in EPS

88.0

EPS

Growth (%) - RHS

44.5

Exhibit 25: Dividend payout (%) and cash balance (INR b)

Cash (INR b)

Dividend Payout (%)

37.1

24.5

9.7

8.1

11.0

15.4

12.2

15.2

23.7

37.6 39.4 37.3

39.9

-21.1

16.3

33.4

37.0

7.4

16.7

32.0

-7.8

-29.2

92 123 178 243 261 305 403

Source: MOSL, Company

Exhibit 26: Despite significant capex, FCF to remain strong

(INR b)

FCF conversion (FCF as % of PAT)

7.7

4.9

-6

8.3 8.7 8.0

Capex (% of sales)

Exhibit 27: ROE v/s ROIC (%)

120

100

ROE

ROIC

6.5

6.3

5.4

4.6

4.6 5.0 4.5

94 104

-25

85 109

Source: Company, MOSL

6 August 2018

Maruti Suzuki

Exhibit 28: Key assumptions | Snapshot of revenue model

000 units

A1 (M800)

Growth (%)

% of Dom vols

MPV (Vans)

Growth (%)

% of Dom vols

A2 (other hatchbacks)

Growth (%)

% of Dom vols

A3 (Dzire, Ciaz)

Growth (%)

% of Dom vols

Uvs (Ertiga, Compact SUV)

Growth (%)

% of Dom vols

Total Domestic

Growth (%)

% of Total vols

Exports

Growth (%)

% of Total vols

Total Volumes

Growth (%)

ASP (INR 000/unit)

Growth (%)

Net Sales (INR b)

Growth (%)

FY14

1.6

102

-7.6

9.7

672

0.7

63.8

202

14.4

19.1

-22.8

5.8

1,054

0.2

91.2

101

-16

1,155

-1.4

372

18.5

436

FY15

0.0

129

26.3

11.0

730

8.6

62.3

244

20.9

20.8

11.6

5.8

1,171

11.1

90.6

122

1,292

11.9

379

1.9

438

FY16

0.0

143

11.2

11.0

779

6.8

59.7

288

18.3

22.1

38.4

7.2

1,305

11.5

91.3

124

1,429

10.6

387

2.0

500

FY17

0.1

152

6.0

10.5

832

6.7

57.6

264

-8.4

18.3

196

107.3

13.6

1,445

10.7

92.1

124

1,569

9.8

403

4.1

575

FY18

0.6

155

2.1

9.4

936

12.5

56.6

299

13.1

18.1

254

29.6

15.3

1,654

14.5

92.9

126

1,780

13.4

434

7.7

680

FY19E

0.9

176

13.6

9.4

1,057

13.0

56.2

348

16.5

18.5

283

11.6

15.1

1,882

13.8

94.2

116

-8

1,998

12.3

448

3.3

798

FY20E

0.8

187

6.0

8.7

1,188

12.4

55.1

414

18.9

19.2

348

22.7

16.1

2,155

14.5

94.5

125

2,280

14.1

461

2.8

921

Source: Company, MOSL

6 August 2018

Maruti Suzuki

Financials and Valuations

Income Statement

Y/E March

Net Op Income

Change (%)

EBITDA

EBITDA Margins (%)

Depreciation

EBIT

EBIT Margins (%)

Interest

Other Income

EO Expense

PBT

Tax

Effective tax Rate (%)

PAT

Change (%)

% of Net Sales

Adj. PAT

Change (%)

2014

437,918

0.5

51,871

11.8

20,844

31,027

7.1

1,759

7,317

36,585

8,755

23.9

27,830

16.3

6.5

27,830

16.3

2015

499,706

14.1

67,129

13.4

24,703

42,426

8.5

2,060

8,316

48,682

11,570

23.8

37,112

33.4

7.6

37,112

33.4

2016

575,381

15.1

88,844

15.4

28,202

60,642

10.5

815

14,610

74,437

20,794

27.9

53,643

44.5

9.5

53,643

44.5

2017

680,348

18.2

103,517

15.2

26,021

77,496

11.4

894

23,001

99,603

26,101

26.2

73,502

37.0

11.0

73,502

37.0

2018

797,627

17.2

123,122

15.4

27,579

95,543

12.0

3,457

20,455

2,507

110,034

32,816

29.8

77,218

5.1

9.9

78,977

7.4

2019E

921,084

15.5

141,197

15.3

29,384

111,813

12.1

850

18,864

129,827

37,650

29.0

92,177

19.4

10.2

92,177

16.7

(INR Million)

2020E

1,080,757

17.3

171,756

15.9

31,552

140,203

13.0

800

30,757

170,160

48,496

28.5

121,665

32.0

11.5

121,665

32.0

Balance Sheet

Y/E March

Sources of Funds

Share Capital

Reserves

Net Worth

Loans

Deferred Tax Liability

Capital Employed

Application of Funds

Gross Fixed Assets

Less: Depreciation

Net Fixed Assets

Capital WIP

Investments

Curr.Assets, Loans

Inventory

Sundry Debtors

Cash & Bank Balances

Loans & Advances

Others

Current Liab. & Prov.

Sundry Creditors

Provisions

Net Current Assets

Appl. of Funds

E: MOSL Estimates

2014

1,510

208,270

209,781

16,851

5,866

232,498

227,018

119,114

107,904

26,214

101,179

70,061

17,060

14,137

6,298

28,895

3,672

72,860

64,103

8,757

-2,800

232,497

2015

1,510

252,709

254,219

1,802

884

256,905

147,111

26,989

120,122

18,169

139,514

74,809

26,859

11,157

183

2,639

33,971

95,709

84,106

11,603

-20,900

256,905

2016

1,510

297,332

298,842

774

1,943

301,559

153,218

28,118

125,100

10,069

199,322

84,909

31,321

13,222

391

1,744

38,231

117,841

105,748

12,093

-32,932

301,559

2017

1,510

362,801

364,311

4,836

4,662

373,809

186,595

53,668

132,927

12,523

284,810

77,392

32,622

11,992

138

978

31,662

133,843

126,001

7,842

-56,451

373,809

2018

1,510

416,063

417,573

1,108

5,589

424,270

214,239

80,649

133,590

21,259

352,902

81,841

31,608

14,618

711

2,878

32,026

165,322

155,025

10,297

-83,481

424,270

2019E

1,510

471,930

473,441

1,108

5,589

480,138

275,498

110,033

165,465

10,000

352,902

135,470

45,423

20,188

34,954

2,878

32,026

183,699

163,613

20,086

-48,229

480,138

(INR Million)

2020E

1,510

548,207

549,718

1,108

5,589

556,415

325,498

141,586

183,912

10,000

352,902

217,978

53,298

23,688

106,089

2,878

32,026

208,378

183,299

25,079

9,600

556,415

6 August 2018

Maruti Suzuki

Financials and Valuations

Ratios

Y/E March

Basic (INR)

Adjusted EPS

Consol EPS

Cash EPS

Book Value per Share

DPS

Div. payout (%)

Valuation (x)

Consol. P/E

Cash P/E

EV/EBITDA

EV/Sales

P/BV

Dividend Yield (%)

FCF Yield (%)

Profitability Ratios (%)

RoIC

RoE

RoCE

Turnover Ratios

Debtors (Days)

Inventory (Days)

Creditors (Days)

Work. Cap. (Days)

Asset Turnover (x)

2014

92.1

94.4

163.4

694

12.0

15.2

98.3

56.8

52.3

6.4

13.4

0.1

0.5

18.8

13.3

16.5

-48

1.8

2015

122.9

126.0

207.8

842

25.0

24.5

73.7

44.7

39.7

5.5

11.0

0.3

1.1

26.7

14.6

19.8

-57

1.9

2016

177.6

182.0

275.3

989

35.0

23.7

51.0

33.7

29.3

4.6

9.4

0.4

2.1

39.9

18.0

25.0

100

-69

1.9

2017

243.3

248.6

334.8

1,206

75.0

37.1

37.4

27.7

24.4

3.8

7.7

0.8

2.5

60.0

20.2

26.9

-72

1.8

2018

261.4

266.7

358.0

1,382

80.0

37.6

34.8

25.9

19.9

3.1

6.7

0.9

2.9

84.1

18.5

27.3

103

-79

1.8

2019E

305.1

311.2

408.4

1,567

100.0

39.4

29.8

22.7

17.1

2.7

5.9

1.1

1.9

97.4

19.5

27.2

-65

1.9

2020E

402.8

409.2

513.7

1,820

125.0

37.3

22.7

18.1

13.7

2.2

5.1

1.3

3.1

105.7

22.1

30.7

-60

1.9

Cash Flow Statement

Y/E March

Profit before Tax

Interest

Depreciation

Direct Taxes Paid

(Inc)/Dec in WC

Other Items

CF from Oper.Activity

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Invest.

CF from Inv. Activity

Change in Networth

Inc/(Dec) in Debt

Interest Paid

Dividends Paid

CF from Fin. Activity

Inc/(Dec) in Cash

Add: Op. Balance

Closing Balance

2014

36,585

-7,636

20,844

-8,320

7,562

49,035

-34,927

14,108

-14,002

-48,929

3,373

-1,615

-2,417

-659

-553

7,750

7,197

2015

48,682

2,060

24,703

-10,407

7,457

-9,288

63,207

-31,487

31,720

-12,613

-44,100

-13,282

-2,098

-4,241

-19,621

-514

697

183

2016

74,437

815

28,202

-19,099

14,631

-14,141

84,845

-26,327

58,518

-45,947

-72,274

-2,353

-921

-9,090

-12,364

207

183

390

2017

99,603

894

26,021

-23,214

21,940

-22,451

102,793

-33,723

69,070

-58,056

-91,779

2,527

-1,095

-12,725

-11,293

-279

391

112

2018

110,034

3,457

27,579

-30,550

28,058

-20,728

117,850

-35,653

82,197

-47,168

-82,821

-3,728

-3,464

-27,268

-34,460

569

138

707

2019E

129,827

850

29,384

-37,650

-1,009

-18,864

102,539

-50,000

52,539

18,864

-31,136

-850

-36,310

-37,160

34,243

711

34,954

(INR Million)

2020E

170,160

800

31,552

-48,496

13,305

-30,757

136,565

-50,000

86,565

30,757

-19,243

-800

-45,388

-46,188

71,135

34,954

106,089

6 August 2018

Maruti Suzuki

NOTES

6 August 2018

Explanation of Investment Rating

Investment Rating

BUY

SELL

NEUTRAL

UNDER REVIEW

NOT RATED

Expected return (over 12-month)

>=15%

< - 10%

> - 10 % to 15%

Rating may undergo a change

We have forward looking estimates for the stock but we refrain from assigning recommendation

Maruti Suzuki

*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.

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Maruti Suzuki

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6 August 2018