Prabhudas Lilladher is bullish on Maruti Suzuki has recommended buy rating on the stock with a target price of Rs 8428 in its research report dated January 28, 2021.
Broker Research
February 05, 2021 / 08:57 PM IST
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Prabhudas Lilladher’s research report on Maruti Suzuki
For Q3FY21, MSIL reported lower than estimated EBITDA at Rs22.3bn (PLe Rs25.6bn) led by combined impact of 1) RM inflation (+330bp QoQ), 2) weak product mix and 3) unfavorable forex. However higher other income at Rs9.9b (PLe Rs6.8b) boosted adj.PAT at Rs19.4b (Rs18.5b). The recent price hike should partially dilute RM inflation in 4Q, however we expect gross margins to remain under pressure. Positive demand sentiments even post festive have lead to MSIL’s overall order backlog to remain healthy at ~1.5 months. We remain constructive on MSIL as we believe its not only the beneficiery of shift towards personal mobility but also structural shift towards petrol/CNG segments. We cut FY22/23 EPS by 3%/1% to factor in weaker mix.
Outlook
We factor in EBITDA/PAT CAGR of 15%/17% over FY20-23 and maintain Buy on the stock with revised price target of Rs8,428 (earlier Rs8,465) based on 27x Mar23 EPS (unchanged, v/s 30x 5yr LPA).
For all recommendations report, click here
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