Maruti Suzuki (Q3 FY14)

India Infoline News Service | Mumbai |

The company reported a PAT of Rs6.8bn which was lower than our expectations. The underperformance was owing to lower than expected other income and higher depreciation.

CMP Rs1,563, Target Rs1,808, Upside 15.7%

  • Net sales decline 2.7% yoy owing to 4.4% yoy decline in volumes. However, yoy comparison is redundant as Q3 FY14 numbers are inclusive of Suzuki Powertrain numbers which were not a part of Q3 FY13 results

  • OPM at 12.4% was tad better than our estimates of 12.3% but much better than consensus estimates of ~11.8% because of cost cutting initiatives of the company

  • PAT grows by a modest 1.7% sequentially to Rs6.8bn lower than our estimates owing to lower than expected other income and higher than estimated depreciation

  • In Gujarat Suzuki will set up a plant with first phase capacity of 0.25mn solely to be sold by Maruti at zero margin ensuring no profitability loss for Maruti

  • We maintain our BUY rating with a revised 9-month target of Rs1,808 and see the deal as positive to the company’s long term profitability trend 

Result table
(Rs m)
Q3 FY14
Q3 FY13
% yoy
Q2 FY14
% qoq
Volumes
288,151
301,453
(4.4)
275,586
4.6
Net Realisation (Rs/unit)
368,546
363,471
1.4
370,550
(0.5)
Net sales
108,938
112,003
(2.7)
104,681
4.1
Material costs
(71,838)
(82,173)
(12.6)
(66,663)
7.8
Purchases
(6,176)
(5,668)
9.0
(5,981)
3.3
Personnel costs
(2,997)
(2,311)
29.7
(3,723)
(19.5)
Other overheads
(14,380)
(12,938)
11.1
(15,099)
(4.8)
Operating profit
13,548
8,913
52.0
13,214
2.5
OPM (%)
12.4
8.0
448bps
12.6
(19)bps
Depreciation
(5,414)
(3,583)
51.1
(4,992)
8.5
Interest
(448)
(459)
(2.5)
(434)
3.2
Other income
1,170
1,886
(38.0)
1,010
15.8
PBT
8,856
6,756
31.1
8,799
0.6
Tax
(2,044)
(1,743)
17.2
(2,097)
(2.5)
Effective tax rate (%)
23.1
25.8
23.8
Reported PAT
6,811
5,013
35.9
6,702
1.6
PAT margin (%)
6.3<
BSE 9,141.35 100.50 (1.11%)
NSE 9,133.80 91.55 (1.01%)

***Note: This is a NSE Chart

 

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