Motilal Oswal's research report on Maruti Suzuki
MSIL’s 3QFY21 operating performance was impacted by higher costs, which more than off-set operating leverage benefits. While the demand environment is strong, cost absorption would be gradual keeping margin in check for FY22. n We lower our FY21E/FY22E EPS by 6%/2% to factor in higher cost, which is diluted by volume upgrades, lower depreciation, and higher other income. Maintain Buy with a TP of INR9,000/share (27x Mar’23E consolidated EPS).
Outlook
We value the stock at 27x Mar’23E consol. EPS (at a 10% discount to its 5-year avg P/E v/s 25x earlier to factor in for strong demand & stable market share). Maintain Buy.
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