Top Indian Companies: Maruti Suzuki India Ltd

Maruti Suzuki India Limited, is an Indian automobile manufacturer, based in New Delhi. As of September 2021 Maruti Suzuki has a market share of 49 percent in the Indian passenger car market.

Maruti Udyog Limited was founded by the Government of India on 24 Jan 1981 with Suzuki Motor Corporation as a minor partner, only to become the formal JV partner and license holder of Suzuki in August 2021.

The first manufacturing factory of Maruti was established in Gurugram, Haryana, in the same year.

Maruti Suzuki has two manufacturing facilities in Haryana (Gurgaon and Manesar), and one manufacturing complex in Gujarat wholly-owned by parent company Suzuki which supplies its entire production to Maruti Suzuki.

Maruti Suzuki has 3,598 sales outlets across 1,861 cities in India. The company aims to increase its sales network to 4,000 outlets by 2020. It has 3,792 service stations across 1,861 cities throughout India. Maruti is part of Nifty 50 index with a weightage of 1.5%.

Shareholding Pattern

The Shareholding Pattern page of Maruti Suzuki India Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 302080060 100%

Promoters 0 0%

Foreign Institutions 71292649 23.6%

Banks Mutual Funds 22174325 7.34%

Others 4472091 1.48%

General Public 9853169 3.26%

Financial Institutions 24004064 7.95%

Foreign Promoter 170283762 56.37%

Latest Q4 and FY23 Results

Maruti Suzuki reported 42 per cent rise in consolidated net profit at Rs.2,671 crore for March quarter 2022-23, driven by higher sales, improved realisation and favourable forex movement.

The country's largest carmaker logged a net profit of Rs 1,876 crore in January-March 2021-22. Net sales during the fourth quarter rose to Rs 32,060 crore from Rs 26,749 crore in the year-ago period, Maruti Suzuki India (MSI) said in a regulatory filing.

For the entire 2022-23, MSI posted a consolidated net profit of Rs 8,211 crore against Rs 3,879 crore in 2021-22. Net sales last fiscal year stood at Rs 1,17,571 crore against Rs 88,330 crore in 2021-22.

In the fourth quarter, the company said, it sold a total of 5,14,927 vehicles, higher by 5.3 per cent year-on-year. Sales in the domestic market stood at 4,50,208 units, up 7.1 per cent against Q4 FY22.

Sales in the export market stood at 64,719 units compared to 68,454 units in March quarter FY22, the auto major said.

In 2022-23, it sold a total of 19,66,164 vehicles, despite missing production of about 1,70,000 units due to a shortage of electronic components. This translated to a growth of 19 per cent over FY22 sales volume of 16,52,653 vehicles, it added.

The sales volume in the year comprised 17,06,831 units in the domestic market and the highest-ever exports of 2,59,333 units, MSI said.

The company's board recommended the highest-ever dividend of Rs 90 per share compared to Rs 60 per share in FY22.

In a virtual press conference, MSI Chairman RC Bhargava said the company performed better than last year despite witnessing various challenges like chip shortage, high commodity prices and inflation.

"Despite so many challenges, we have crossed Rs 1 lakh crore turnover milestone last fiscal," Bhargava said.

He noted that the industry is expected to grow 5-7 per cent in current fiscal year and the company was looking to grow faster than that.

He added that the company fell short of 34,000 units from the 20 lakh sales mark last fiscal but will try to go past the target this year.

On chip shortage, Bhargava said the situation is expected to be better in the next three quarters of the current fiscal with shortages persisting in the first month of the ongoing quarter.

MSI could not produce about 1.7 lakh units last fiscal due to chip shortage. It suffered a production loss of 38,000 units in the fourth quarter.

To a query regarding the small car sales, Bhargava said the segment is expected to witness a flat growth this year with the market continuing to shift towards the SUV vertical.

"In 2023-24, we don't see any growth in the segment..it is going to be flat as the prices of such cars have gone up affecting the demand," he noted.

As of Wednesday, the company has a backlog of 4.12 lakh units with maximum waiting for Ertiga, MSI said. Shares of the company closed 0.26 per cent up at Rs 8,503.15 apiece on the BSE

Brokerage Outlook

MSIL’s 3QFY22 result was operationally better as margins expanded ~250bp QoQ at 6.7% (v/s est of 5.3%) led by operating leverage and better cost control. As chip shortage challenges continue to ease out QoQ, better utilization to aid further margins expansion in 4QFY22 as well. This coupled with strong order backlog at ~264k units, lower discounts and price hike (~2% in Jan) to help healthy profitability in short to med term.

Brokerage, Yes Securities, believe, MSIL to continue benefit from healthy domestic demand momentum (~10% CAGR), coupled with increasing CNG penetration (currently ~30% mix in existing models) and higher exports (~40% CAGR) over FY21-24.

However, re-rating levers such as significant new launches (with class leading features), intensifying competition in growing SUV space and wait & watch stance on EVs would limit any meaningful upside.

Yes Securities have marginally cut FY23/24 EPS estimate by 0.3%/0.5% to factor in lower other income. Brokerage hence, continue to maintain REDUCE rating on the stock with TP at Rs7,782 based on 24x FY24 EPS.

MSIL currently trades at 34.5x/26.5x of FY23/24 EPS (v/s 27.5x of 10 year LPA), which factors in the near term positives.

ESG and Sustainability

Aimed to realise the Suzuki Global Environment Charter which sets Suzuki’s philosophy and basic policy towards the environment that environmental brand SUZUKI Green was introduced.

SUZUKI Green is an environmental brand that widely appeals internally and externally by clarifying environmental policy and next generation eco friendly technologies and environmental activities.