Maruti Suzuki Research

MARUTI SUZUKI INDIA LTD.

BSE Code: 532500 NSE Code: MARUTI Reuters Code: MRTI.NS Market Data Rating CMP (`) Target (`) Potential Upside Duration 52 week H/L (`) All time High (`) Decline from 52WH (%) Rise from 52WL (%) Beta Mkt. Cap (` bn) Enterprise Val (` bn) Fiscal Year Ended FY10A Revenue (`bn) Net Profit(`bn) Share Capital EPS (`) PE (x) P/BV (x) EV/EBITDA (x) ROE (%) ROCE (%) 296.2 24.9 1.4 86.1 13.0 2.8 8.4 21.1 24.4

November 04, 2011

Bloomberg Code: MSIL:IN

Maruti Suzuki India Ltd (MSIL) is the largest car manufacturing company of India, which has been ruling the Indian auto market for more than two decades. A subsidiary of Japanese auto giant, Suzuki Motor Corp, the company has two manufacturing facilities in India with a capacity to produce over a 1.2 million vehicles annually. MSIL is also coming up with a new manufacturing facility in Gujarat by 2015. Offering 15 brands in over 150 variants, the company intends to expand its manufacturing capacity to 1.75 million by 2013.

BUY

1,123

1,300

~15%

Long Term 1,599.9/1,010.4 1,740 476.9 112.6 0.48 32.5 30.3

Investor’s Rationale



After being crippled by endless tool down and strikes by workers,

production halt, consecutive rate hikes etc in the first half of the fiscal, MSIL is gearing up to make up for the losses by ramping up the productivity at both its manufacturing facilities, working on full shifts to achieve a set target over 100,000 vehicles for Oct’11. Beside, the first phase completion of MSIL’s proposed Gujarat unit in 2015 will help the company to lead its peers with a productive capacity of 1.85 million units.

FY11A 370.4 22.8 1.4 78.9 14.2 2.3 8.3 16.5 18.5

FY12E 357.6 19.8 1.4 68.4 16.4 2.1 9.3 12.5 13.1

FY13E 408.3 25.1 1.4 86.9 12.9 1.8 7.0 13.7 15.3

 With rising yen pressure, MSIL has witnessed significant increase of 1013% production cost in recent times. Addressing the issue, the company has chalked out a three-year-long indigenization programme...