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Target: ₹10,300
CMP: ₹8,817.25
Maruti Suzuki India Ltd has reported a strong recovery in Q3-FY22, despite losing 90k units due to the semiconductor shortage. With an improvement in supplies, stability in RM cost, and launch of new products, MSIL is expected to recover both market share and margin.
Revenue was flat y-o-y but rose 13 per cent q-o-q to ₹23,250 crore, EBITDA declined by 30 per cent y-o-y (+82 per cent q-o-q) to ₹1,560 crore, and PAT stood at ₹1,010 crore (-48 per cent y-o-y/+113 per cent q-o-q). Revenue grew 33 per cent y-o-y, while EBITDA/adjusted PAT fell 2 per cent/37 per cent in M9-FY22.
MSIL is targeting a market share of 50 per cent in coming years by plugging gaps in its product portfolio. Its retail market share stood at 44 per cent in first nine months of FY22, but was nearly 49 per cent in Dec’21 led by supply side improvements.
Strong demand, softening commodity inflation, and improving semiconductor shortage will support a recovery in margin. We expect a recovery in H2-CY22 in both market share and margin, led by an improvement in supplies, favorable product lifecycle, and mix, as well as price action/cost-cutting and operating leverage.
We raise our FY22/FY23 EPS by 21 per cent/6 per cent, factoring in higher realisations and lower depreciation.
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