Buy Maruti Suzuki India, target price Rs 8,815: Nirmal Bang Institutional Equities

Nirmal Bang Institutional Equities has buy call on Maruti Suzuki India with a target price of Rs 8815. The current market price of Maruti Suzuki India is Rs 7732.75.

Maruti Suzuki India, incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 233139.35 Crore) operating in Auto sector.

Maruti Suzuki India key Products/Revenue Segments include Passenger Cars & Light Duty Utility Vehicles, Mould & Dies, Other Operating Revenue, Service Income, Scrap, Rental Income for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 27191.90 Crore, up 15.31 % from last quarter; Total Income of Rs 23581.20 Crore and up 12.72 % from last year same quarter. The company has reported net profit after tax of Rs 1804.20 Crore in latest quarter.

Investment Rationale
The brokerage remains positive about MSIL and expects 13% volume CAGR over FY22-24E, led by new model launches and growth in exports. It expects the company to regain a part of its lost share on the back of new SUV launches. Nirmal Bang has resume coverage on Maruti Suzuki with Buy and values the stock at 26x FY24E EPS (broadly in-line with 10-year average P/E) to arrive at a TP of Rs 8,815. Key risks include (1) Delays in new model launches (2) further margin erosion (3) loss in market share (4) supply chain challenges leading to loss in volume and (5) faster than anticipated EV adoption.

Promoter/FII Holdings
Promoters held 56.37 per cent stake in the company as of 31-Mar-2022, while FIIs owned 22.57 per cent, DIIs 16.25 per cent.