Bluechip stock Maruti Suzuki could hit all-time high post Q3 outcomes: Buy?

One of the well-known bluechip corporations within the nation, Maruti Suzuki India Ltd (MSIL) has a market price of 2,65,279.16 Cr. The agency has launched its wonderful Q3 outcomes, reporting a web revenue of 2,351 crore for the third quarter that led to December 2022 (Q3 FY23), greater than double from 1,011 crore in the identical quarter a 12 months earlier. When in comparison with Q2FY22 at 23,246 crore, the corporate’s income from operations grew by about 25% YoY to 29,044 crore in Q3FY23.

The firm reported web gross sales of 27,849 crore in the course of the quarter, up from 22,187 crore in Q2FY22. Meanwhile Maruti Suzuki stated that its working revenue improved to 2,123 crore within the third quarter of FY2022-23 from 919 crore in the identical quarter of FY2021-22.

Maruti Suzuki reported promoting 465,911 automobiles, 403,929 items have been offered on the home market, and 61,982 items have been exported in Q3FY23. Production was hampered by round 46,000 automobiles on this quarter because of a scarcity of digital elements. This in contrast with complete gross sales of 430,668 items throughout the identical interval the 12 months earlier than, of which 365,673 items have been offered domestically and 64,995 items have been exported. At the tip of the quarter of December 2022, pending buyer orders totalled round 363,000 automobiles, of which roughly 119,000 have been for just lately launched fashions.

Post the spectacular Q3 earnings of Maruti Suzuki, the analysis analysts of the broking agency ICICI Securities stated “Maruti Suzuki’s (MSIL) Q3FY23 EBITDA margin at 9.8%, up 50bps QoQ, was largely in line our estimate, pushed by RM price profit and beneficial foreign money motion. ASP was up 8% QoQ by higher combine as there was decrease proportion of mini automobiles, larger share of UVs (up ~500bps QoQ) and introduction of the higher-end UV mannequin Grand Vitara. MSIL volumes have been down 10% QoQ because of post-festive season destocking of entry-level automobiles and half-yearly manufacturing shutdown in Dec’22, which was made up partly by the 8% rise in blended ASP. With restricted drivers of TCO inflation and new launches like Fronx and Jimny, we keep our FY24E quantity at 2.2mn, up 10% from FY23E ranges. Blended low cost inched up QoQ by ~Rs5k/unit because of weak point in entry-level automotive gross sales and better retail items offered. Keeping our FY24E earnings largely unchanged, we improve our ASP estimate by ~4% and likewise lower EBITDAM by 100bps to ~11.5%. Maintain BUY with a DCF-based goal value of Rs10,455 (earlier Rs10,494), implying 23x FY25E core EPS. We consider, the sub-10% EBITDAM regardless of beneficial uncooked materials prices, foreign money strikes and blend, was because of decrease scale. Thus, with restricted scope for margin enlargement, we lower our FY24E EBITDAM to 11.5%.”

The research analysts of ICICI Direct Research said “MSIL’s stock price has de-grown at ~1.3% CAGR from ~ 9,280 levels in January 2018, underperforming the broader Nifty Auto index. We retain our BUY rating tracking reignited focus on SUVs, market share gain ambition, clear timeframe for EV launch and robust order book. Introducing FY25E, we now value MSIL at unchanged target price of 11,200 i.e. 28x P/E on FY24E-25E average EPS of 400/share.”

The analysis analysts of Motilal Oswal stated “MSIL reported a powerful beat in 3QFY23, pushed by higher combine (8% beat on ASPs) and better different earnings. Recently launched merchandise to mirror in P&L from 1QFY24; commodity value profit largely mirrored in 3QFY23; and the influence of adversarial JPY is anticipated to mirror from 1QFY24. We count on continued enchancment in efficiency and response to new merchandise to behave as catalysts for the stock. We improve FY23 EPS estimates by 14% to mirror the advantage of combine and better ‘other income’, however reiterate our FY24 estimates as the combination profit is offset by the Fx influence. We reiterate our Buy score with a TP of INR10,500.”

The research analysts of Nirmal Bang said “We remain positive on MSIL and expect 15% volume CAGR over FY22-FY25E, led by new model launches and market share gains. We expect the company to regain part of its lost share in UVs on the back of new SUV launches. We maintain BUY on MSIL and value it at 26x Sept’24E EPS (broadly in line with 10-year average P/E) to arrive at a TP of Rs11,188. Key risks include: (1) Delays in new model launches (2) Further margin erosion (3) Loss of market share (4) Supply chain challenges leading to loss of volume (5) Faster-than-anticipated EV adoption.”

On the NSE, the shares of Maruti Suzuki closed at present at 8,770.00 apiece stage, up by 0.82% from the earlier shut of 8,698.80. The stock recorded a complete quantity of 1,131,883 shares as in comparison with the 20-Day common quantity of 469,368 shares. The bluechip stock Maruti Suzuki touched a 52-week-high of 9,769.00 on (31-Oct-2022) and a 52-week-low of 6,536.55 on (08-Mar-2022). The goal value (TP) acknowledged by the aforementioned brokerage corporations, nonetheless, represents a contemporary all-time high for the stock.

The views and suggestions made above are these of particular person analysts or broking corporations, and never of Mint.


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