Maruti Suzuki

INDIA Automobiles

Maruti Suzuki

Buy

Company Update/ Estimates change 26 August 2013

Strong franchise in a tough environment; Retain Buy We retain Buy with reduced TP of Rs.1,641 (Rs.1,919 earlier) to factor in earnings cut of 5%/11% for FY14E/FY15E on the back of INR depreciation, slower than expected volume growth and higher discounts (Interaction with dealers (refer pg. 6) indicates fresh discount on Swift diesel). Though macro environment remains weak, we believe MSIL is well placed to storm back in the event of recovery, with its strong product offerings, ability to launch models/facelifts at faster intervals and distribution reach. While the expectation on FY15E recovery is low, we see multiple tailwinds of pent-up demand, new model cycle, and consumer preference shifting back to petrol cars. Valuations at P/E of 11.7x FY15E EPS (22% discount to 5yr historical average) look attractive. Competition has had minimal impact on its franchise: MSIL has been able to hold on to its overall market share in the PV industry, despite increased competition. Though we believe competition is likely to intensify, we expect this more in the UV space as most players have been aggressively launching models in MSIL’s leadership domain but with limited success. In the UV space, with the launch of Ertiga, MSIL has managed to challenge the players and gain a market share of 12%. Our channel check suggests that MSIL is working on a new car and an SUV/Crossover for release in FY15E.

Target Price

Rs1,641 Key Data

CMP* Upside

Rs,1,297 Bloomberg Code 27% Cur Shares O/S (mn) Rs1,919 Dil Shares O/S(mn) Buy Mkt Cap (Rsbn/USDbn)

Previous Target Previous Rating

Price Performance (%)* MSIL NIFTY

MSIL IN 302.1 302.1 390.6/6.6 1777/1082

52 Wk H / L (Rs)

1M (16.3)

6M (19.2)

5.3

(2.8)

1Yr 15 Year H / L (Rs) 17.2 Daily Vol. (3M NSE Avg.) 15.6 Face Value (Rs)

1777/419.7 652,665 5

*as on 23 August 2013; Source: Bloomberg, Centrum Research

Shareholding pattern (%) Promoter FIIs DIIs Public & others Total

Q1FY14

Q4FY13

Q3FY13

Q2FY13

56.21 22.03 13.07 8.69 100.0

56.21 22.36 12.59 8.84 100.0

54.21 23.13 14.35 8.31 100.0

54.21 20.45 16.16 9.18 100.0

Source: BSE

Competition has had minimal impact on its franchise

Multiple tailwinds to support FY15E recovery: While confidence on FY15E recovery remains low, we see multiple tailwinds 1.) Pent-up demand (as PV industry is likely to see low single digit growth over FY11-FY13E) 2.) Rural demand at 30% of sales, up 19% in 1QFY14 3.) New model cycle yet to play out for FY14 and FY15 4.) Continued focus on exports (mgmt expects flat growth in FY14E, despite a drop of 22% YTDFY14) and 5.) The shifting of consumer preference back to petrol models. YTDFY14, petrol segment was flat while diesel segment declined by 12%. Earnings revised downwards for FY14E/FY15E: Driven by lower than expected volume performance YTDFY14, we are now factoring in a drop of 2% in overall volumes for FY14E (earlier 2% growth) and 11% growth for FY15E (earlier 14%). Also, in our numbers, we now factor in Re/$ at 57.6/64.2 and Yen/$ at 98/105 for FY14E/FY15E. Due to INR depreciation, slower than expected volume growth and increased discounts, we cut our FY14E/FY15E earnings by 5.2%/11.3% respectively. Valuations and risks: At the CMP of Rs.1,297, the stock trades at 13.4x/11.7x FY14E/FY15E EPS. We retain Buy with a TP of Rs1,641 (based on 16x FY15E Core EPS + Cash per share of Rs.260 + Rs.7 of subsidiaries). Key risks are, 1) Unfavorable Fx (higher than expected INR depreciation or lower than expected weakening of Yen to USD 2) High inflation leading to sharp monetary tightening pushing car demand recovery beyond F15 and 3) Failure of new launches to gain expected market share.

Source: Company, SIAM Centrum Research, market share in %

Earning Revision Particulars

FY14E

(Rs mn) Total Volumes Total income EBITDA PAT

FY15E

Revised Previous

Chg (%)

1,151,059 1,181,112 444,301 469,274 51,030 54,311 29,284 30,880

(2.5) (5.3) (6.0) (5.2)

Revised Previous Chg (%) 1,278,548 1,346,056 (5.0) 518,815 556,364 (6.7) 58,878 65,764 (10.5) 33,489 37,769 (11.3)

Source: Centrum Research

Ajay Shethiya, [email protected]; 91 22 4215 9855 Y/E Mar (Rsmn) FY11 FY12 FY13 FY14E FY15E

Revenue 369,199 355,871 435,879 444,301 518,815

YoY (%) 24.6 (3.6) 22.5 1.9 16.8

EBITDA 35,442 27,388 42,296 51,030 58,878

EBITDA (%) 9.6 7.7 9.7 11.5 11.3

Adj. PAT 21,685 18,610 23,921 29,284 33,489

YoY (%) (13.2) (14.2) 28.5 22.4 14.4

FDEPS Rs. 75.0 64.4 79.2 96.9 110.9

RoE (%) 16.9 12.8 14.2 14.7 14.8

RoCE (%)

P/E (x)

16.3 12.5 14.0 14.5 14.6

Source: Company, Centrum Research Estimates

Centrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet

17.3 20.1 16.4 13.4 11.7

EV/EBITDA (x) 8.6 11.1 7.9 6.2 5.1

Multiple tailwinds to support FY15E volume recovery

"We have had the best monsoon in 10-15 years. And this means larger income in rural areas. Rural sales have been quite positive even in this period of recession and depression. I think rural sales will go up in coming months,”. Secondly, the festival season is about to start from the south first and then move up. And historically the sales of cars have gone up during the festival season. "We have elections coming up in November in five states and after that there will be general elections. And during the election period there is much more money in the system and past experience is that the sale of cars also increases at the time of elections or just before. So these are three positive factors which are going to come into play for the rest of the year,” Mr. RC Bhargava, Chairman, MSIL on CNBC, 23rd August 2013

Given rupee depreciation, slower than expected volume growth and discounts on diesel vehicles, we are revising our earnings estimates downwards for FY14E/FY15E by 5.2%/11% respectively. We are now factoring in volume drop of 2% for FY14E, far more conservative than the management’s guidance of 2-4% volume growth. While confidence on FY15E volume recovery remains low, we see strong tailwinds in the form of 1.) Pent-up demand (as passenger car industry is likely to see low single digit growth for 3 years over FY11-FY13E 2.) Rural demand of 30% of sales; continues to hold with strong demand (up 19% in 1QFY14; MSIL’s wide spread distribution network and rural penetration bodes well) 3.) New model cycle yet to play out for FY14 and FY15 (our channel check suggests that MSIL is working on a new car and an SUV/Crossover) 4.) Continued focus on Exports (despite a drop of 22% YTDFY14, management is confident of achieving flat growth in FY14E and aims at higher exports in FY15E) and 5.) Consumer preference shifting back to petrol cars (YTDFY14 from April’13 to July’13, petrol car growth was flat vs. a drop of 12% for the diesel segment), to benefit MSIL the most. In the event of a recovery, we believe MSIL is well placed given its strong product offerings, ability to launch models at faster intervals, positioning in right segments, strong brand loyalty, better re-sale value and deeper distribution reach. We are factoring in a volume growth of 11% for FY15E.

….Competition has had minimal impact on its franchise MSIL, despite increased competition, has largely been able to hold on to its overall market share in the passenger vehicle industry. Though we believe competition is likely to intensify in the PV industry, we see this happening more in the UV space as most players have been aggressively launching models in MSIL’s leadership domain but with limited success. In the UV space, with the launch of Ertiga, MSIL has been able to challenge the players and gain a market share of 12%. Our channel check suggests that MSIL is working on a new car and an SUV/Cross over for release in FY15. As a result, we remain confident on MSIL’s ability to maintain overall market share at current levels. In our opinion, strong product offerings, the ability to launch models at faster intervals, strong brand loyalty, better re-sale value, deeper distribution reach and its pre-owned car initiative will help MSIL restrict significant market share loss. ….Strong product portfolio and brands MSIL currently has one of the strongest product portfolios among peers and commands market leadership in every segment where it is present. We believe new product launches at frequent intervals have helped MSIL build a strong and balanced product portfolio in the compact and the midsize segments. Now with Etriga, it is also present in the UV segment.

Exhibit 1: Strong and balanced product portfolios Period

Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Dec M 800

1983 1984 1985 Zen

1993 1994 2000 2001

Versa Swift (P)

2006 Swift (D)

Sx4 Swift Dzire

India becomes the sole manufacturing hub for Suzuki’s entire global requirement of this model.

Zen Estilo A Star

Ritz

2009 2010

Esteem Alto

2005

2008

Gypsy

Baleno

Grand Vitara

2003

2007

Alto launched in 2000, is still one of the largest selling model

Marks MSIL’s entry in the fast growing diesel segment

1999

Omni

Eeco

2011 Ertiga

2012

With the launch of Ertiga, it has managed to gain market share of 12% in the UV segment

Alto K10

SX4 Hybrid

Wagon R Stingray

2013 Source: Company, Centrum Research

2

Maruti Suzuki

New model cycle yet to play out for FY14 and FY15 In the weak demand environment, we believe launching new models is paramount, lending visibility to volume growth and improving overall sentiments. MSIL continues to maintain its policy of launching one new model every year, but the FY14 model is yet to be launched. Our channel check suggests that it is working on an SUV/Crossover for launch in FY15. In near terms, auto blogs are talking about a new Alto, new A-star and replacement for Sx4 to be launched soon. The company recently launched Wagon R Stingray. With petrol demand coming back, new models/facelifts in the petrol segment should further revive consumer sentiments. Given the success of past model launches, we remain confident on MSIL’s ability to get the right product at the right price point and in the right segment. In the UV segment where it was not present, the launch of Ertiga has helped MSIL gain a market share of 12%. Any news flow on new model launches should lend visibility to FY14E and FY15E volume growth as the new model cycle is yet to play out.

55.0 50.0 45.0 40.0 35.0 30.0 25.0 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13

20.0

Passenger Cars

Passenger Cars and MPV

Exhibit 3: Market share in UV segment 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13

Exhibit 2: Competition has had minimal impact on its franchise

Passenger Vehicles

Market share in UV's

Source: Company, Centrum Research, Market share drop in Oct’11 and August’12 more of aberration related to labour issue at its Manesar plant

3

Source: Company, Centrum Research

Maruti Suzuki

Earnings revision Driven by lower than expected volume performance YTDFY14, we are now factoring in a drop of 2% in overall volumes for FY14E (2% growth earlier) and 11% growth for FY15E (earlier 14%). Also, in our numbers, we now factor in Re/$ at 57.6/64.2 and Yen/$ at 98/105 for FY14E/FY15E. On the back of INR depreciation, slower than expected volume growth and increased discounts, we are revising our FY14E/FY15E earnings downwards by 5.2%/11.3% respectively. Exhibit 4: Earnings Revision Particulars

FY14E Revised

Volumes

Change

Previous

(%)

1,151,059

1,181,112

(2.5)

444,301

469,274

(5.3)

EBITDA

51,030

54,311

(6.0)

PAT

29,284

30,880

(5.2)

Revenues

Revised

Comments Given lower than expected volume performance for YTDFY14E (April-July 2013, down 7.5%), we are now factoring in volume drop of 2% compared to earlier growth of 1%. This would mean residual monthly run rate of 100,166 units vs. 87,433 units achieved so far. We expect residual volume to trend higher supported by strong traction seen in exports (homologation issues now being addressed in Indonesia and Algeria, its major export markets) and to factor in seasonally strong 2HFY14. Lower contribution from diesel portfolio (34% vs. 37% in FY14E) coupled with recent discounts on diesel models are likely to impact domestic realizations for FY14E. However, given Re/$ depreciation, export realizations are likely to remain strong YoY (1QFY14, export realization have seen a YoY growth of 28%). Though the RE/$ has seen sharp depreciation recently, we maintain our RE/$ assumption of 57.4 for FY14E and Yen/$ of 98. Higher deprecation in Yen to $ is likely to offset the negative impact of INR depreciation.

FY15E Previous

Volumes

1,278,548

1,346,056

(5.0)

Revenues EBITDA PAT

518,815 58,878 33,489

556,364 65,764 37,769

(6.7) (10.5) (11.3)

Though, near term visibility on volumes is low, given the pent-up demand (industry to see low single digit growth for 3 years in a row) , new model cycle (our channel check suggests MSIL is working on a new car and an SUV/Cross over for release in FY15) and export focus, we are hopeful of volume recovery in FY15E. We are expecting volume growth of 11% for FY15E and a realization growth of 3% with stabilization of diesel mix and normalization base of discounts. We see normalization of Petrol and Diesel mix We are factoring in Re/$ at 64.2 and Yen/$ at 105 based on Bloomberg consensus.

Source: Company, Centrum estimates

Exhibit 5: Key Assumptions Volumes ( in Units) Domestic volumes Export volumes Total Volumes ( a) YoY Change (%) Domestic volumes Exports volumes Total Volumes

FY11

FY12

FY13

FY14E

FY15E

1132741 138266 1271007

1005442 127379 1132821

1051046 120388 1171434

1030671 120388 1151059

1146121 132427 1278548

(11.2) (7.9) (10.9)

4.5 (5.5) 3.4

(1.9) (1.7)

11.2 10.0 11.1

Source: Company, Centrum Research

4

Maruti Suzuki

Valuations At the CMP of Rs.1,297, the stock trades at 13.4x/11.7x FY14E/FY15E EPS. We retain Buy with a TP of Rs1,641 (based on 16x FY15E Core EPS + Cash per share of Rs.260 + Rs.7 of subsidiaries). At 1yr forward PE of 11.7x, the stock is trading at 22% discount to its 5 yr historical average. The stock price has corrected by almost 22% over the last three months largely on account of concerns over sharp deprecation in INR to USD, lower than expected volume growth and deterioration in diesel sales leading to weaker product mix. While we believe that there are no immediate triggers, we expect outperformance on a one-year basis driven by new product cycle which should lend visibility to FY15E volume growth. Also we see lower diesel demand as the first phase of transition to normalization of diesel/ petrol easing concerns on weak product mix. Petrol demand growth has been flat vs 12% drop for diesel vehicles YTDFY14. We believe this bodes well for MSIL given its market leadership and one of the strongest portfolios in the petrol segment across price points. Key risks 1) Unfavourable Fx (higher than expected INR depreciation or lower than expected Yen weakening to USD 2) High inflation leading to sharp monetary tightening, pushing car demand recovery beyond F15 and 3) New launches failing to gain share. MSIL’s direct imports, indirect yen imports (via vendors) and royalty payments to Suzuki together account for 24-25% of its net sales. A weak Yen to USD is positive for MSIL’s margins and earnings. We estimate that every 1% yen depreciation to USD can boost MSIL’s EPS by 3.0%, assuming everything else is unchanged and every 1% depreciation in INR to USD can impact MSIL’s EPS by 2% Exhibit 6: Sensitivity Analysis: FY15E % change

% impact on EBITDA

% impact on EPS

Yen depreciation to USD

+1

+23-25bps

+3.0

INR depreciation to USD

+1

-10bps

-2.0

Realization

+1

+10bps

+1.0

Sensitivity to key variables


Exhibit 7: 1 year forward EV/EBITDA chart

Exhibit 8: 1 year forward P/E chart 25

16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

20 15 10

EV/EBITDA

Mean

P/E

Mean

Mean + Std Dev

Mean - Std Dev

Mean + Std Dev

Mean - Std Dev

Source: Bloomberg, Company, Centrum Research Estimates

Apr-13

Aug-13

Dec-12

Aug-12

Apr-12

Dec-11

Apr-11

Aug-11

Dec-10

Apr-10

Aug-10

Dec-09

Apr-09

Aug-09

Dec-08

Apr-08

Aug-08

Dec-07

Apr-07

0

Aug-07

Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13

5

Source: Bloomberg, Company, Centrum Research Estimates

Exhibit 9: Comparative Valuations Company Maruti Suzuki M&M Tata Motors

PE (x) EV/EBITDA (x) RoE (%) Div Yield (%) Mkt Cap CAGR FY13-FY15E (%) EBITDA Margin (%) (Rs bn) Rev. EBITDA PAT FY13 FY14E FY15E FY13 FY14E FY15E FY13 FY14E FY15E FY13 FY14E FY15E FY13 FY14E FY15E 391 9.1 18.0 18.3 9.7 11.5 11.3 16.4 13.4 11.7 7.8 6.2 5.1 14.2 14.7 14.8 0.6 0.8 0.9 501 7.3 8.8 8.3 13.9 14.1 14.3 14.1 13.4 12.0 7.1 6.9 6.0 26.1 22.8 21.9 2.0 2.0 2.3 956 13.6 16.6 19.0 13.0 13.6 13.7 9.7 7.8 6.8 5.0 4.6 4.0 27.7 27.9 24.5 0.7 0.1 0.3

Source: Companies, Centrum Research Estimates

5

Maruti Suzuki

Dealer check - Fresh discounts on Swift Diesel in August 2013 Interaction with dealers reveals fresh discount of Rs.10K on Swift diesel for August’13. Apart from cash discounts, the company is also offering loyalty bonus of Rs.15k on Swift (P&D) and Rs.10k on Swift Dzire (P&D). Discounts on most other models remained largely unchanged MoM. Lower contribution of diesel portfolio (34% in FY14E vs. 37% in FY13) coupled with current discounts on diesel vehicles are likely to impact realizations in FY14E. The month of July’13 has already seen discounts moving up to Rs.14,714 vs. Rs.13,426 in 1QFY14. Exhibit 10: Trend in model wise discounts: Fresh discount seen on Swift Diesel Model wise discount (Rs.)

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

M800 (All Variants) Alto F8 (P) Alto CNG Lxi Alto K10 Wagon-R Lx/Vxi/Vxi ABS (P) Wagon-R CNG Wagon-R (Duo - E4) Estilo (P) Estilo CNG A-Star (All Variants) Ritz (P) Ritz (D) SX4 (P) SX4 CNG SX4 (D) Omni Cargo Petrol Omni Cargo LPG Omni (Other Variants) Swift (Diesel) Dzire (All Variants) Eeco (All Variants) Ertiga Average Discount

14,000 10,000 10,000 15,000 15,000 15,000 35,000 30,000 30,000 30,000 10,000 15,000 30,000 30,000 30,000 10,000 10,000 10,000 15,864

14,000 10,000 10,000 15,000 20,000 20,000 35,000 30,000 30,000 30,000 10,000 20,000 30,000 30,000 30,000 10,000 10,000 10,000 15,000 17,227

14,000 15,000 15,000 20,000 23,000 23,000 30,000 30,000 30,000 30,000 10,000 20,000 30,000 30,000 30,000 10,000 10,000 10,000 15,000 17,955

14,000 18,000 18,000 18,000 20,000 28,000 28,000 25,000 25,000 25,000 10,000 15,000 30,000 25,000 30,000 10,000 10,000 10,000 10,000 16,773

14,000 18,000 18,000 18,000 25,000 28,000 28,000 25,000 25,000 25,000 10,000 15,000 30,000 25,000 30,000 10,000 10,000 10,000 10,000 17,000

14,000 30,000 30,000 30,000 30,000 30,000 28,000 25,000 25,000 25,000 10,000 15,000 30,000 25,000 30,000 10,000 10,000 10,000 10,000 18,955

14,000 28,000 28,000 30,000 30,000 30,000 28,000 25,000 25,000 25,000 10,000 15,000 30,000 25,000 30,000 10,000 10,000 10,000 10,000 8,000 19,136

14,000 28,000 28,000 30,000 30,000 30,000 25,000 25,000 25,000 25,000 10,000 15,000 30,000 25,000 30,000 10,000 10,000 10,000 10,000 10,000 8,000 19,455

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

1.6% 27.9% 14.6% 1.1% 1.1% 3.8% 1.0% 18.4% 16.6% 5.2% 2.9% 5.8% 100%

1.7% 25.6% 13.9% 0.4% 1.0% 4.2% 0.2% 19.8% 18.8% 5.2% 3.2% 6.0% 100%

2.0% 25.4% 13.6% 1.2% 0.8% 4.5% 0.8% 18.3% 18.7% 5.2% 3.7% 5.8% 100%

1.9% 22.0% 14.2% 0.6% 0.7% 4.9% 0.7% 18.3% 21.5% 5.4% 4.2% 5.7% 100%

2.1% 21.1% 16.6% 0.3% 0.6% 3.3% 0.6% 18.4% 22.2% 5.4% 3.8% 5.5% 100%

1.7% 26.1% 12.2% 0.7% 0.7% 4.2% 0.4% 22.4% 16.3% 5.1% 3.8% 6.4% 100%

2.2% 24.2% 17.8% 1.2% 0.4% 3.4% 0.4% 13.9% 20.3% 5.6% 4.4% 6.1% 100%

-

Source: Dealer interaction, Centrum Research

….Model wise contribution to overall sales Model wise discount ( Rs.) M800 Alto Wagon R Estilo A Star Ritz Sx4 Swift Dzire Omni Eeco Ertiga Total

Source: Dealer interaction, Centrum Research

6

Maruti Suzuki

Financials Exhibit 11: Income Statement Y/E March (Rsmn) Sales Volume % Growth Net Sales % Growth Raw Materials Personnel Manufact. & Other Exp. EBITDA EBITDA Margin (%) Depn..& Amortn EBIT Interest Expenses EBT Other Income PBT Tax-Total Tax Rate (%) - Total Adjusted PAT PAT Margin % Growth Reported PAT PAT Margin % Growth

FY11

Exhibit 13: Balance Sheet FY12

FY13

FY14E

FY15E

1,271,007 1,132,821 1,171,434 1,151,059 1,278,548 24.8 (10.9) 3.4 (1.7) 11.1 369,199 355,871 435,879 444,301 518,815 24.6 (3.6) 22.5 1.9 16.8 288,200 281,567 327,452 322,850 382,170 7,036 8,438 10,696 12,835 15,402 38,521 38,478 55,436 57,586 62,366 35,442 27,388 42,296 51,030 58,878 9.6 7.7 9.7 11.5 11.3 10,135 11,384 18,612 19,424 22,479 25,307 16,004 23,685 31,606 36,399 244 552 1,898 1,710 1,330 25,063 15,452 21,786 29,896 35,069 4,824 8,268 8,124 8,636 9,582 29,887 23,720 29,910 38,531 44,651 8,202 5,110 5,989 9,247 11,163 27.4 21.5 20.0 24.0 25.0 21,685 18,610 23,921 29,284 33,489 5.9 5.2 5.5 6.6 6.5 (13.2) (14.2) 28.5 22.4 14.4 21,685 18,610 23,921 29,284 33,489 5.9 5.2 5.5 6.6 6.5 (13.2) (14.2) 28.5 22.4 14.4


Growth Metrics (%) Net sales EBITDA Adjusted PAT

FY11

FY12

FY13

FY14E

FY15E

1,445 137,230 138,675 2,661 1,644 142,980

1,445 150,106 151,551 11,749 3,023 166,324

1,510 184,266 185,777 14,928 4,087 204,791

1,510 210,124 211,634 9,499 4,087 225,220

1,510 239,694 241,204 9,499 4,087 254,790

117,377 (62,083) 8,625 63,919 51,068 14,150 8,245 25,085 21,784 69,264 36,013 5,258 41,271 27,993 142,980

147,347 (72,140) 9,419 84,626 61,473 17,965 9,377 24,362 25,221 76,924 49,714 6,985 56,699 20,225 166,324

197,885 (90,752) 10,280 117,413 70,783 18,407 14,237 7,750 38,290 78,684 53,347 8,741 62,088 16,596 204,792

233,765 (110,176) 6,400 129,989 75,783 23,731 13,052 11,109 34,230 82,122 53,790 8,884 62,674 19,448 225,220

265,765 (132,655) 6,400 139,510 90,783 27,720 15,246 14,757 39,984 97,707 62,833 10,377 73,210 24,497 254,790

Exhibit 14: Cash Flow FY11

FY12

FY13

FY14E

FY15E

24.6 (10.4) (13.2)

(3.6) (22.7) (14.2)

22.5 54.4 28.5

1.9 20.6 22.4

16.8 15.4 14.4

9.6 7.0 6.0

7.7 4.6 5.4

9.7 5.6 5.6

11.5 7.3 6.8

11.3 7.2 6.6

Return Ratio (%) ROE ROcE ROIC

16.9 16.3 33.7

12.8 12.5 24.6

14.2 14.0 23.7

14.7 14.5 22.5

14.8 14.6 23.4

Turnover Ratios (Days) Inventory period Debtors period WC Turnover

15.9 7.4 2.6

20.6 8.9 (3.9)

17.6 10.8 6.7

20.0 11.0 6.2

20.0 11.0 6.2

Solvency ratio (x) Debt-equity (x) Net Debt-equity (x) Liquidity ratio (x) Interest coverage ratio (%)

0.0 (0.5) 1.7 103.7

0.1 (0.5) 1.4 29.0

0.1 (0.3) 1.3 12.5

0.0 (0.3) 1.3 18.5

0.0 (0.4) 1.3 27.4

7.5 10.0 0.6

7.5 11.6 0.6

7.2 9.1 0.6

9.7 10.0 0.7

11.1 10.0 0.9

75.0 75.0 75.0 479.8

64.4 64.4 64.4 524.4

79.2 79.2 79.2 615.0

96.9 96.9 96.9 700.6

110.9 110.9 110.9 798.5

17.3 2.7 8.6 0.8

20.1 2.5 11.1 0.9

16.4 2.1 7.9 0.8

13.4 1.9 6.2 0.7

11.7 1.6 5.1 0.6

Profitability metrics (%) EBITDA Margin EBIT Margin PAT Margin

Dividend DPS (Rs.) Dividend Yield (%) Dividend Payout (%) Per share (Rs) Basic EPS Fully diluted EPS - Reported Fully diluted EPS - Adjusted Book value

Sources of funds Capital Reserves & Surplus Shareholders’ Funds Total Loan Funds Deferred Tax Liabi. - Net Total Application of funds Gross Block Accumulated Dep. Capital WIP Net Fixed Assets Investments Inventories Sundry Debtors Cash & Bank Balances Loans and Advances Tot. CA, Loans & Adv. Current Liabilities Provisions Total Current Liab. & Prov. Net Current Assets Total assets


Exhibit 12: Key Ratios Y/E March

Y/E March (Rsmn)

Valuation metrics (x) P/E P/BV EV/EBITDA EV/Sales

Y/E March (Rsmn) Pre-tax profit Total tax paid Depreciation Chg in debtors Chg in inventory Chg in loans & advances Chg in other current assets Chg in creditors Chg in provisions Chg in other current liabilities Net chg in working capital CF from operating (a) Capital expenditure Chg in Trade investments Chg in marketable securities CF from investing (b) Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Other financing activities CF from financing (c) Net chg in cash (a+b+c)

FY11

FY12

FY13

FY14E

FY15E

29,887 (7,928) 10,135 (146) (2,062) (5,229) 2,971 (1,026) 3,648 (1,844) 30,250 (19,931) (10) 20,698 767 (5,553) (2,518) 1,157 (6,914) 24,103

23,720 (3,731) 11,384 (1,132) (3,815) (3,437) 7,416 1,727 6,285 7,045 38,418 (32,091) (10,405) (42,496) 9,088 (2,518) (3,216) 3,354 (724)

29,910 (4,926) 18,612 (4,860) (443) (13,069) 8,175 1,756 (4,542) (12,983) 30,614 (51,399) (9,310) (60,709) 65 3,179 (2,518) 12,757 13,483 (16,612)

38,531 (9,247) 19,424 1,185 (5,323) 4,060 5,788 143 (5,344) 508 49,215 (32,000) (5,000) (37,000) (5,429) (3,426) (8,855) 3,360

44,651 (11,163) 22,479 (2,194) (3,989) (5,754) 7,978 1,493 1,064 (1,402) 54,566 (32,000) (15,000) (47,000) (3,918) (3,918) 3,648



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Maruti Suzuki

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