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Centrum Broking Report
Maruti Suzuki India Ltd.'s Q1 FY25 print was in-line; revenue/Ebitda/profit after tax grew 9.9%/50.9%/46.9% YoY. Overall volumes grew by 4.8% backed by 3.8%/11.6% growth in domestic and exports business. Strong demand trend led by, 43% new buyers and customer skewness towards SUV which led 29% volume growth.
Further Maruti Suzuki saw highest ever quarterly sales volumes to other OEMs in Q1. We note resilient performance despite high base was driven by,
Persistent strong growth in SUVs (~45% of domestic sales),
Increasing penetration of CNG ~35% of volumes,
strengthening supply chain, and
surge in export volumes.
CNG volumes picked up to ~150,000 units and Maruti Suzuki expect CNG/exports volume to reach 600,000/300,000 units in FY25, though weakness in Mini/compact continue. Inventory level was at ~37days.
Average discount inched up Rs 21,700/unit. Gross margin inched up to 29.8% (+262 bp) on the back of softening commodity prices, favorable forex, operating leverage, leading to better realization. Ebitda margins grew to 12.7% (+344bp).
With better margins in Q1 we tweak earnings and retail Buy rating with a revised target price of Rs 16, 295 (implying 27.8 times FY26E EPS). Demand Skewed towards SUV's and CNG.
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