30 October 2024
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Company Name Maruti Suzuki
Current Market Price Rs 10,273
Calendar Year Return 22.20%
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Incorporated in 1981, Maruti Suzuki India (MSIL) is India’s leading passenger car maker with exports to more than 90 countries. It recently launched two new models in the SUV segment, Fronx and Jimny.
Investing Rationale
Market Leader: MSIL has a cumulative installed capacity of 2.25 million units with a 42 per cent market share in the domestic passenger vehicle (PV) segment. It is adding another million unit capacity at Kharkhoda in Haryana. MSIL plans to have a total capacity of over 4 million units and a 50 per cent market share by FY30 and has recently acquired the Sanand plant from Suzuki Motors.
Wide Portfolio: MSIL has a wide product range across prices from Rs 5-8 lakh to Rs 20 lakh-plus, across hatchbacks, sedans and utility vehicles, and in multiple fuel options, such as petrol, CNG and hybrids. It is a leader in the CNG PV segment (74 per cent) and plans to launch other powertrain options, such as flex fuel in future.
Recent SUV Launches: MSIL has launched a number of SUVs in the last 15 months, which have received good response. Its market share in SUVs stands at 23.3 per cent. MSIL’s FY24 year-to-date (YTD) volume (April-November) has grown 8 per cent with SUV volumes up 83 per cent. Higher share of premium SUVs in the overall sales mix have led to improved margins and profitability. In the last three years, sales grew at 16 per cent compounded annual growth rate (CAGR), while profit grew 27 per cent. The order book as of September 2023 is 320,000 units with SUVs at 90,000 units.
Healthy Growth: PV sales jumped 10 per cent year-on-year (y-o-y) in the festive season. Higher GDP growth in FY24, stable inflation, rising aspirations, and easy financing options is likely to boost the demand for PVs in FY24 and FY25.
EV Foray: MSIL plans to launch its maiden electric vehicle (EV) in FY25. It plans to have a portfolio of six battery EVs by FY30. The company is also looking at backward integration by setting up a battery manufacturing capacity adjacent to the EV facility.
Recommended by: Suresh Shukla, Chief Business Of? cer, SBI Securities
