maruti analysis

Presentation on Maruti Suzuki India Limited

Presented By:-

COMPANY INTRODUCTION

• Maruti Udyog Limited (MUL) was established in Feb 1981.

• A license and a Joint Venture agreement were signed with the Suzuki Motor Company.

• First Indian automobile company to join the million clubs Invests Rs 1,700 Crore in new facility to expand capacity by 2.5 lakh units.

• Maruti has a network of 1000 sales outlets across 668 cities.

• Out of 5 top selling cars, 4 are from Maruti.

• Credit Rating :- AAA

Business

• Compact Segment.

• Sedan Segment.

• Luxury Segment.

• SUV Segment.

Management

Chairman Mr. R. C. BhargavaManaging Director & CEO Mr. Shinzo Nakanishi

Director & Managing ExecutiveOfficer (Production)

Mr. Tsuneo Ohashi

Director & Managing ExecutiveOfficer (Marketing & Sales)

Mr. Shuji Oishi

Director Mr. Osamu Suzuki

Chief General Manager(Legal) and CompanySecretary

Mr. S. Ravi Aiyar

Shareholding Pattern

Sector Analysis

• Impact of raising finance cost.

• Sales of PV cars have grown at a CAGR of 8.8%, which is less than previous year.

• In July car sales dropped by 9%.

• Decrease in quarter ended sales.

Growth Drivers

• Increase in income level.

• Change in mindset.

• Infrastructure development

• India’s Population.

• Automotive hub.

Concerns• Rising interest rates.

• Rising fuel prices.

• Raising prices of raw material.

• Threat of new entrant.

• Labour unrest.

Company Analysis

• Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea.

• Car industry grew by 29% in the year 10-11.

• Quarterly sale has been declined.

• Increase in sales from 1.02 millions to 1.27 million.

Market Share

Financials

Profit & Loss account

Particulars 2011 2010 2009

Net Sales 36,286.50 29,317.70 20,729.40

Other Income 1,222.70 662.00 491.70

Total Income 37,582.40 30,180.60 20,864.50

Total Expenses 33,435.70 25,694.00 18,396.20

Operating Profit 2,924.00 3,824.60 1,976.60

Interest 24.40 33.50 51.00

Depreciation 1,013.50 825.00 706.50

Profit Before Tax 3,108.80 3,628.10 1,710.80

Balance SheetParticulars 2011 2010 2009

Equity Share Capital

144.50 144.50 144.50

Reserves 13,723.00 11,690.60 9,200.40

Secured Loans 31.20 26.50 0.10

Unsecured Loans 278.10 794.90 698.80

Net Block 5,529.40 5,024.70 4,070.80

Net Current Assets 2,112.10 67.60 1,938.40

Total Assets / Liabilities 14,176.80 12,656.50 10,043.80

2008 2009 2010 20110

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

0.91

1.51

0.91

1.5

Current Ratio

Current Ratio

2008 2009 2010 20110

0.02

0.04

0.06

0.08

0.1

0.120.11

0.07 0.07

0.02

Debt Equity Ratio

Debt Equity Ratio

Ratios Analysis

Particulars 2011 2010 2009

Quick Ratio 1.16 0.68 1.26

Interest Cover 128.41 105.39 34.21

Inventory Turnover Ratio

28.69 30.47 30.46

Return On Net Worth(%)

16.50 21.10 13.04

Operating Profit Margin(%) 8.05 12.74 9.18

Net Profit Margin(%) 6.10 8.34 5.72

Dividend History

2007 2008 2009 2010 20110

1

2

3

4

5

6

7

8

4.55

3.5

6

7.5

Dividend Trend

Performance Chart

Index Comparison

VALUATION

Maruti SuzukiMahindra & Mahindra

LTP 1104.95 812.60

Change  (%) 2.82 2.93

52 W H/L1,599.90 / 1,045.00

826.40 / 585.10

Particulars 2011

P/E 13.11

Price/Book 2.24

Industry P/E 15.92

Market Cap 31104.06

Div Yield(%) 0.70

EPS 79.22

CEPS 114.29

P0 =

D1

1+ r+

TV

1+ r

1104.95 =

5.3

1+0.13+

TV

1+0.13

Dividend History

2011 7.5

2010 3.5

2009 3.5

2008 5

2007 4.5

TV = Rs.1243.29

Calculation of Target Price

VALUATION……

Recommendation

• Fundamental point of view.