Reduce Maruti Suzuki India: target of Rs 7000: ICICI Direct

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Reduce Maruti Suzuki India: target of Rs 7000: ICICI Direct



ICICI Direct's research report on Maruti Suzuki India

Maruti Suzuki (MSIL) posted a steady performance in Q3FY21. Total operating income for the quarter was at Rs 23,458 crore, up 13.3% YoY amid flattish ASPs QoQ at Rs 4.48 lakh/unit, 13.4% YoY growth in overall volume to 4.96 lakh units. EBITDA in Q3FY21 was at Rs 2,226 crore with corresponding margins at 9.5%. Margins fell 80 bps QoQ on account of 250 bps gross margin deterioration while the company realised savings in other expenses (% of sales). Consequent PAT was at Rs 1,941 crore, up 24% YoY, supported by higher other income and lower effective tax rate (20.8%).

Outlook

We maintain our cautious stance on MSIL and value it at Rs 7,000 i.e., 30x P/E on FY23E EPS (earlier target price Rs 6,450). We assign REDUCE (SELL earlier) rating on the stock.

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Source : https://www.moneycontrol.com/news/business/reduce-maruti-suzuki-india-target-of-rs-7000-icici-direct-6447001.html/amp