maruti suzuki india limited. - pratibhuti

1 Analyst: Abhishek Manjrekar

Risk Return Matrix

CMP(25/03/2011) Target Price(25/03/2012) Recommendation

Rs. 1,182.30 Rs. 1,642.42 BUY

Maruti Suzuki India Limited. Initiating Coverage March 25, 2011

BSE NSE BLOOMBERG REUTERS

532500 MARUTI MSIL:IN MRTI.BO

52 Week Price Range INR 1126.85 ‐1599.9Average Daily Volume (six months) 4,69,96,316Beta 0.77Dividend Payout ratio 6.90%Shares Outstanding(millions) 288.910 MMarket Capitalization(billions) INR 336.089% Institutional Holdings 37.99% Promoter Holdings 54.21Book Value/ Share INR 409.65Debt / Total Capital 2.80%Return on Equity 23.58%

Market Profile

• Strong growth in middle class households from current 31.4 million to 53.3 million by 2015‐16 and further to 113.8 million households by 2025‐26 coupled with their increased propensity to spend on cars will drive growth of Indian automobile industry.

• With 13 out of 1000 people in India owning a car, Indian market is hugely underpenetrated. With rising income levels and huge investments in infrastructure, automobile industry in India will benefit.

• MSIL has production capacity in line with the market demand and generates very good free cash flow. Operating assets comprise one third of total MSIL assets and MSIL can easily divert the remaining two third of its assets (currently invested in financial assets) into its core business whenever required. Thus, future capital expenditures can easily be financed through excess assets or gross cash flow. Low debt position also gives additional financing flexibility to MSIL. MSIL presents a case for low risk and high returns.

• MSIL has very high returns on invested capital. Very good existing dealer network with excellent knowledge of local market conditions will provide scalability to MSIL and help maintain returns on capital at a level exceeding its cost of capital.

EP S - FY0 9 EP S - FY1 0 EP S - FY1 1 (E) EP S - FY1 2 (E)

R s . 42.18 R s . 86.44 R s . 80.32 R s . 81.87

Maruti Suzuki India Ltd. Initiating Coverage

2 March 25, 2011

Industry Analysis: Passenger Vehicles

Industry Structure

In India, passenger vehicle industry is divided into passenger cars, utility vehicles and multipurpose vehicles. The industry has been growing at a good rate for the past seven years (Refer Appendix 1). In fact, industry has grown by 25.6% in FY2009-10 and by 27% in FY2010-11.

The passenger cars segment is divided into A1 (Mini), A2 (Compact), A3 (Mid-size), A4 (Executive), A5 (Premium), A6 (Luxury). Utility vehicles are divided into segments - B1 and B2 - depending on mass. Major players in each segment are specified in Appendix 2 and Appendix 3.

Growing Middle Class

We believe that Indian passenger vehicle industry is poised to grow at a very good rate in the coming years. Passenger vehicle growth will primarily be driven by India’s growing middle class. According to NCAER, India currently has 31.4 million middle class households (annual income Rs. 3.4-17 lakhs). This translates to 160 million middle class individuals. This figure is estimated to increase to 53.3 million households (267 million households) by 2015-16 and further to 113.8 million households (547 million individuals). Based on this data, middle class households will grow at a CAGR of 11.2% till 2015-16 and then at a CAGR of 7.9% till 2025-26. This also means that middle class will comprise 37.2% of the population in 2025-26 from the current 13.1% of the population. Typical Indian middle class family typically saves 50% of its income and Indian middle class has shown propensity to spend their annual savings on cars. This can be verified from the fact that 49% of the total cars in India are owned by the middle class, which is 13.1% of India’s total population. Growth rate of middle class households can be looked upon as a base rate for car sales. Add to it, swap rate of old cars for new cars and the passenger vehicle market looks good.

Market penetration

Now, compare the Indian passenger vehicle market with other markets in the world. In India, only 10% of total households own a car compared to approximately 91% in US. In India, only 1.3% of the people own a car. In US and Europe, the same figure is 44% and 60.4% respectively. The penetration of Indian market is bound to rise with rising income. In FY2010-11, corporate salaries are expected to rise by 12.9%. In spite of threats to the industry in the form of increased competitive rivalry due to entry by new players and the corresponding market share loss of existing players, we believe that companies with right fundamentals will still create value for its shareholders as the Indian passenger car market grows nine times by the end of FY2025-26.

Indian budget for FY2011-12 maintained the excise duty for automobiles at 10%. This augurs well for car sales in the next financial year.

Growing middle class and its propensity to spend on cars will drive the automobile industry Under penetration of middle class will increase the size of the market and companies with good fundamentals will gain


3 March 25, 2011

Competitive Rivalry (Refer appendix 3)

Tata Motors (Tata Nano) and Maruti Suzuki (Maruti 800) are the biggest players in A1 segment. Major players in A2 segment are Maruti Suzuki (A2 - Alto, Wagon R, Zen, Swift, Ritz, A-star), General Motors (Spark, UVA, Beat), Ford (Fusion, Figo), Hyundai (Santro, Getz, i10, i20), Nissan (Micra) and Skoda (Fabia). Major players in the A3 segment are Maruti (SX4, D-zire), Honda( City), Hyundai(Accent, Verna), Mahindra Renault(Logan), Tata (Indigo, Indigo Marina), Toyota (Etios) and Volkswagen India (Beetle, Vento). BMW (3 Series), GM (Chevrolet Optra(NB), Cruze), Mercedes-Benz(C-Class, SLK - Roadster, Cabriolet, Coupe) , Toyota(Corolla), Volkswagen Audi(O5), VW – India (Jetta) are the major players operating in A4 segment. BMW, Mercedes-Benz (E-Class, CLS), Nissan, Skoda Toyota and VW Audi are operating in A5 segment of passenger cars while A6 segment has BMW, Mercedes- Benz and VW Audi as the main players.


4 March 25, 2011

Business Description

Production Capacity

Maruti Suzuki is leading player in the Indian automobile Industry (Refer appendix 2 and 3). Maruti is the first Indian car maker, which has achieved the feat of rolling out 10 million cars. At present, the company has a manufacturing capacity of 1.2 million units per annum in the Indian market. It has a capacity of 8.5 lakh units at the Gurgaon plant and 3.5 lakh units at Manesar. It plans to build two more plants in Manesar with a production capacity of 250,000 each. The plants are expected to be operational in 2012 and 2015 respectively. This will enhance the total capacity to 1.7 million units annually by 2013.

Dealer Network

Maruti had a sales network of 802 centres in 555 towns and cities and provides support to customers at 2740 workshops in over 1335 towns and cities, as of March 2010. We believe that Maruti’s excellent dealer network all over the country has given access to a loyal customer base. We believe that MSIL should be able to maintain high return on invested capital because its existing dealer network would provide it with huge scalability on its existing customer base. Also, first mover advantage with its existing dealers will help Maruti better understand local market conditions. With rural demand now at 20% of its total sales, Maruti is better positioned than any other company to increase rural sales.

After Sales Service

Maruti also offers a great after sales service and also helps its customers to get a better resale price compared to models other car manufacturers. Also, cost of spares needed for car models of other companies are substantially higher compared to Maruti. This ensures customer loyalty.

Business Strategy

MSIL has always adopted the value for money approach. It has positioned itself well in the small car market, especially in segments A2 and A3. In current financial year till February, MSIL’s domestic sales in the A2 segment have grown by 26.2% and by 32.1% in the A3 segment. Its B and C segment sales have grown 55% and 61.6% respectively. Maruti has entered the executive segment (A4) with Kizashi. We believe that Maruti will try and position itself in the executive sedan segment in the medium term. Maruti has always ensured that its consumers enter with entry level cars and ensure that they stay with them as long as possible by helping them migrate to its higher end models. With existing middle class moving up the income hierarchy, Maruti should be ready with offering in the A4 segment. When concept RIII materializes, Maruti should be able to fill up the void in its portfolio in MPV segment. However, success of RIII and Kizashi cannot be predicted since information available is limited.

Production capacity to grow in line with market demand. MSIL expected to sell 1.46mn and 1.8mn cars in FY12 and FY13 respectively

Excellent dealer network gives Maruti competitive advantage. Excellent after sales service ensures customer service and ensures customer loyalty MSIL is increasing its presence in upper segments in addition to entry level segments


5 March 25, 2011

Valuation and Financial Analysis

We valued MSIL using free cash flow to the firm (FCFF) approach (Refer appendix 4, 5 and 6). We projected revenue growth rate of 17% for the industry in FY2011-12 as we factor in a rising interest rate environment and short term supply chain disruptions in Japan. We persist with our view of high interest rate environment for the next four years and gradually increase the revenue growth rate to 24% for the next five years as we believe that consumers will adjust to the higher interest rate environment over this period. We then gradually decrease the growth rate to 11% in 2025-26 as growth will taper down from a higher base. In line with increasing competition, we model a decrease in market share from current 44.9% to 25% by 2025-26. This implies MSIL to grow at a rate lower than the rate of growth of the industry and that is in line with the current market scenario. MSIL has been generating high return on invested capital (ROIC). ROIC has been in the range of 19-50% and averages 40.5% over the past three years. This is consistently above the WACC of 10.87%. However, we envisage that MSIL’s ROIC will consistently decrease to 27% by 2025-26 due to entry by new players in respective car segments and increased commodity prices, primarily due to demand from emerging countries (Refer appendix 7). For continuing value calculation, we initially assume growth rate of 11% and return on new invested capital (RONIC) of 18% for first eight years into continuing value period and then a growth rate of 7% and RONIC of 11% into perpetuity. ROIC above WACC in the continuing value period is justified based on good brand name, customer loyalty and well entrenched dealer network of MSIL. Our FCFF yields current market price of Rs. 1479.59. We appreciate this price by the cost of equity of 11% for a 1-year target price of Rs. 1642.42

Source of value creation for MSIL is good returns on invested capital. One reason for good ROIC is improvement in productivity. Ratio of fixed assets/revenues decreased from 19.1% in FY2007-08 to 17.6% in FY2009-10. This implies increased capital efficiency. We anticipate same ratio going ahead and is in line with management discussion of 3Q FY2010-11 results. Maruti Suzuki also has good cash flows from its core operations. Free cash flow has Rs. 3 billion, Rs 3.4 billion, Rs 17.8 billion is the past three financial years. MSIL typically maintains operating assets in line with anticipated consumer demand. MSIL has maintained core operating assets at one third of total available capital. It puts two third of its total capital in other investment/loans and maintains less in excess cash. We believe that other investments of MSIL are liquid enough to be recalled when needed. MSIL may have missed a trick by not anticipating a pickup in the demand in the past two years. We anticipate MSIL to maintain its operating assets in the range of 40-50% of the total assets in short-medium term. MSIL has debt equal to 2.8% of total capital and we expect it to maintain that debt to capital ratio. It also implies that MSIL can borrow at good rates, if required. Also, loans from Japan come at low interest rate, which lowers the cost of capital. MSIL’s excellent capital position and very good free cash flow enable it continue paying dividends in the range of 7-8.5% of net income.

Good rate of growth and returns on invested capital drives MSIL valuation. Increased fixed assets efficiency, good capital position, minimal debt and high free cash flow ensures that MSIL is a good buy.


6 March 25, 2011

Sensitivity Analysis

Growth Rate

Decrease base case growth rate by 1% in corresponding year Base Case

Increase base case growth rate by 1% in corresponding year

Stock Price(Rs) 1559.51 1,642.42 1732.59

WACC 11.87% 10.87% 9.87% Stock Price(Rs) 1390.07 1,642.42 2071.19

Royalty expenses

(% of sales) 6% 5% 4% Stock price(Rs) 1328.06 1,642.42 1956.77

Raw material cost (% of sales) 74‐75% 73‐74% 72‐73% Stock price(Rs) 1332.28 1,642.42 1952.55

MSIL stock price is extremely sensitive to the cost of capital, raw materials and royalty expenses. Cost of raw materials and royalty expenses are a function of exchange rate.

MSIL stock price is highly sensitive to the cost of raw materials and royalty expenses, which are directly related to the value of Yen.


7 March 25, 2011

Key Risks

Interest rate risk India raised its benchmark rates (Repo and Reverse repo rate) for 8th time, the most in Asia, to 6.75%. Banks are ready to pass the fresh rate hike of RBI to customers. Around 75-77% of cars sold in India are financed. Banks had last raised the rates in Feb by up to 0.50 % which is expected to increase by additional 0.25% resulting into increase of the EMI. Interest rates for car financing are in the range of 11.5-12.25%. We believe that interest rates will continue to be high for the foreseeable future. Car sales may be down in FY2011-12 but consumers will ultimately adjust to high interest rate environment. Currency exchange risk Due to the recent earthquake and Tsunami in Japan, Japanese investors are exited their holdings in Australia, New Zealand, Brazil and other countries and repatriated cash to Japan. This move has led the Japanese currency ‘Yen’ to appreciate in the short term. However, the movement of Japanese currency is still open to debate. Tsunami crises will curb Japanese exports and increase its imports. This will lead to depreciation of Yen as demand for foreign currency would increase. Also, if new bonds are issued by Japanese Government, it is highly likely that Bank of Japan (BoJ) would buy those bonds as BoJ seeks to maintain the lower interest rate. 95% of Japanese bonds are hold domestically keeping the interest rates low. Foreign investors would demand higher yields on the bonds as the international community is concerned about Japanese debt, which is 200% of GDP. If domestic investors run out of savings, then BoJ will have to step in so that foreign investors are kept out. Printing more money this way will help depreciate the Japanese currency. The ultimate path of Yen will depend on the net effect of repatriation and quantitative easing by BoJ. As Maruti Suzuki imports 23% of its auto components (direct and indirect), rising Yen can impact input costs adversely. Risk due to increasing fuel prices Global rise in prices of oil and gas are a big risk for the automobile industry as a whole. This might hit the demand for cars in the short term and lead the automobile companies to offer discounts. However, we believe that consumers would adjust to relatively higher price levels, as demand from emerging countries and a recovering US would keep commodity prices high in the future.

Risk of supply chain disruption Worries of supply chain disruptions have arisen in the short term due to earth quake and Tsunami in Japan. Japan supplies 92% of the total “Automobile continuous variable transmissions” (Source: Thomson Reuters, Credit Suisse). Japan also provides auto grade steel that is used by auto manufacturers. This would affect the production capabilities of automobile manufacturers in FY2011-12. Product Recalls Risks related to product defects, product recalls, production lapses or unforeseen happenings can affect valuation of Maruti Suzuki.

High interest rate environment may slow demand

Yen appreciation may increase input costs

Rising fuel prices may affect demand

Supply chains disruptions may affect production plans


8 March 25, 2011

Appendix: Appendix 1: Passenger Vehicle Volume Sales in India

Sales/annum 2003‐04 2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11E

Passenger Vehicles 9,02,096 10,61,572 11,43,076 13,79,979 15,49,882 15,52,703 19,49,776 24,76,216 Growth rate 17.7% 7.7% 20.7% 12.3% 0.2% 25.6% 27.0%

Source: Society of Indian Automobile Manufacturers

Appendix 2: Maruti Suzuki Volume Sales

Maruti Suzuki Sales Jan‐10 Jan‐11 Growth rate Feb‐10 Feb‐11 Growth rate Apr 2009 ‐ Feb 2010 Apr 2010 ‐ Feb 2011 Growth rateA1 ‐ M800 2494 1876 ‐24.8% 3178 2712 ‐14.7% 30266 23570 ‐22.1%A2 ‐ Alto, WagonR, Zen, Swift, Ritz, A‐star 58540 72479 23.8% 60380 72090 19.4% 578427 730092 26.2%A3 ‐ SX4, D‐zire 8995 11930 32.6% 10254 13024 27.0% 88862 117362 32.1%A4 Kizashi 0 25 0 35Total passenger cars 70029 86285 23.2% 73812 87851 19.0% 697555 871059 24.9%B‐ MUV ‐ Gypsy, Grand Vitara 135 192 42.2% 285 156 ‐45.3% 3255 5046 55.0%C‐ Van Type‐ Omni, Versa, Eeco 10923 13945 27.7% 10668 13536 26.9% 90450 146210 61.6%Domestic Sales 81087 100422 23.8% 84765 101543 19.8% 791260 1022315 29.2%Export Sales 14562 9321 ‐36.0% 11885 10102 ‐15.0% 131982 126738 ‐4.0%Total Sales 95649 109743 14.7% 96650 111645 15.5% 923242 1149053 24.5%



9 March 25, 2011

Appendix 3: Main Competitor Sales

Competitors ‐ Domestic markets Feb‐10 Feb‐11 Growth rate Apr 2009 ‐ Feb 2010 Apr 2010 ‐ Feb 2011 Growth rateA1: MiniTata Nano 4105 8262 101.3% 25640 61725 140.7%Total 7283 10974 50.7% 55906 86295 54.4%A2: CompactGM(Spark, UVA, Beat) 6215 6299 1.4% 52827 65614 24.2%Ford(Fusion, Figo) 106 7883 7336.8% 615 69190 11150.4%Hyundai(Santo, Getz, i10, i20) 28198 30009 6.4% 255360 293642 15.0%Nissan(Micra) 0 2030 0 10242Skoda(Fabia) 673 1466 117.8% 5732 9325 62.7%Total 110977 134609 21.3% 1015690 1309742 29.0%A3: Mid‐sizeHonda(City) 5076 3668 ‐27.7% 40690 43858 7.8%Hyundai(Accent, Verna) 2752 2465 ‐10.4% 27710 33317 20.2%Mahindra Renault(Logan) 537 1151 114.3% 4981 8991 80.5%Tata(Indigo, Indigo Marina) 7373 8966 21.6% 49097 80728 64.4%Toyota(Etios) 0 2786 0 4844Volkswagen India(Beetle, Vento) 36 3573 9825.0% 130 14784 11272.3%Total 29973 37195 24.1% 247498 329970 33.3%A4: ExecutiveBMW(3 Series) 189 176 ‐6.9% 1219 2076 70.3%GM(Chevrolet Optra(NB), Cruze) 824 1125 36.5% 4971 10401 109.2%Mercedes‐Benz(C‐Class, SLK ‐ Roadster, Cabriolet, Coupe) 175 364 108.0% 1574 2406 52.9%Toyota(Corolla) 863 985 14.1% 8760 9754 11.3%Volkswagen Audi(O5) 33 88 166.7% 261 893 242.1%VW ‐ India(Jetta) 311 201 ‐35.4% 2302 3016 31.0%Total 4520 4771 5.6% 41365 47274 14.3%A5: PremiumBMW( 5&6 Series) 122 273 123.8% 1315 2688 104.4%Mercedes‐Benz(E‐Class, CLS) 161 229 42.2% 1183 2357 99.2%Nissan(Teana) 23 14 ‐39.1% 186 228 22.6%Skoda(Superb) 373 255 ‐31.6% 2836 3627 27.9%Toyota(Camry, Prius) 14 20 42.9% 260 350 34.6%VW Audi(A4, A6) 136 251 84.6% 1089 2147 97.2%Total 1253 1313 4.8% 10505 14532 38.3%A6: LuxuryBMW(7‐Series) 24 38 58.3% 335 496 48.1%Mercedes‐Benz(S‐Class, SL_Roadster, Maybach) 59 21 ‐64.4% 435 506 16.3%VW Audi(O7 AB) 43 87 102.3% 458 661 44.3%Total 126 146 15.9% 1228 1690 37.6%Total Passenger Cars 154132 189008 22.6% 1372192 1788603 30.3%Total Passenger Vehicles 194635 235521 21.0% 1751680 2274553 29.8%Maruti Market Share(Passenger Cars) 50.8% 48.7%Maruti Market Share(Passenger Vehicles) 45.2% 44.9%



10 March 25, 2011

Appendix 4: Weighted average cost of capital (WACC)

WACC Calculation Reference Stock Price(Rs) 1148.40 As of 25th March 20111 No of shares outstanding(millions) 288.91 Company documents Market Capitalization(in Rs. Billion) 331.78 Calculated Risk free rate 3.54% 10 year US Treasury Strips Market returns 13.27% Bloomberg

Beta 0.77

Calculated on average monthly returns for past 60 months with Reference to MSCI emerging markets index and industry competitors

Total Debt(in Rs. Billion) 9.53 Company documents Cost of Equity 11.00% Calculated Cost of debt, Pre tax 9.16% Based on AAA rating of MSIL debt by CRISIL Tax rate 31.3% Marginal tax rate WACC 10.87% Calculated

Appendix 5: Pro forma Income Statement

Income Statement Forecast(Rs. Million) Mar‐10 Mar‐11(E) Mar‐12(E) Mar‐13(E) Mar‐14(E) Mar‐15(E)Sales 296138 377087 430998 516484 609657 731338Consumption of raw materials and components 212948 275273.8 318938 382198 451147 541190Purchase of traded goods 9050 11523.82 13171 15784 18631 22350Consumption of stores 2432 3097 3540 4242 5007 6006Employee remuneration and benefits 5360 8673 9051 10846 12803 15358Royalty 10335 18854 21550 25824 30483 36567Other expenses 7495 9993 11421 13687 16156 19380Manufacturing, administrative and other expenses 17830 28847 32971 39511 46639 55947Selling and distribution expenses 9160 11664 13331 15976 18858 22621Total expenditure 256780 339078 391003 468557 553084 663473Less: Vehicles/Dies for own use 296 377 431 516 609 731Total expenses 256484 338702 390572 468040 552474 662742EBITDA 39654 38386 40426 48444 57183 68596Depreciation 8215 10108 12871 14711 17629 20809EBITA 31439 28278 27555 33733 39554 47787Total Other Income 5060 6085 7647 10025 11764 13927Total Non operating expenses(income) ‐4486 ‐5656 ‐7024 ‐9402 ‐11141 ‐13320Profit before tax 35925 33934 34578 43134 50695 61107Total Taxes 10949 10728 10926 13627 16015 19305Profit after tax 24976 23206 23652 29507 34680 41802Net Income margin 8.3% 6.1% 5.4% 5.6% 5.6% 5.6%EPS 86.45 80.32 81.87 102.13 120.04 144.69Adjusted EBITA margin 10.6% 7.5% 6.4% 6.5% 6.5% 6.5%


11 March 25, 2011

Appendix 6: Pro forma Balance Sheet

Balance Sheet(Rs. Million) Mar‐10 Mar‐11(E) Mar‐12(E) Mar‐13(E) Mar‐14(E) Mar‐15(E)AssetsCash and Cash Equivalents 1830 7542 12759 18229 26319 36053Inventories 12088 15614 18078 21664 25572 30676Sundry debtors 8099 10313 11787 14125 16673 20001

Deferred Tax Assets 836 836 836 836 836 836Net PPE 50088 63780 72898 87357 103116 123697Capital ‐ Work in Progress 3876 4936 5641 6760 7979 9572Intangible Assets ‐ Lump Sum Royalty 159 124 89 54 19Loans and Advances 15707 17278 19005 20906 22997 25296Investments 71766 78943 86837 95521 105073 115580Total Assets 164449 199364 227931 265452 308584 361712Liabilities and Shareholders EquityCurrent Liabilities 29347 37907 43890 52596 62084 74475Provisions 3575 4552 5203 6235 7360 8829Interest accrued but not due on loans and others 43 43 43 43 43 43Proposed Dividend 1733 1610 1641 2047 2406 2900Corporate Dividend Tax 288 268 273 340 400 482Unclaimed Dividend 4 4 4 4 4 4Deferred Tax Liability 2206 2206 2206 2206 2206 2206Salary Related Liabilities 688 821 980 1170 1397 1669Short term and Long Term Loans 8214 12274 12274 12274 12274 12274

Capital 1445 1445 1445 1445 1445 1445Reserves and Surplus 116906 138234 159972 187092 218965 257384Total Liabilities and Shareholders equity 164449 199364 227931 265452 308584 361712

Statement of Retained Earnings(Rs. Million) Mar‐10 Mar‐11(E) Mar‐12(E) Mar‐13(E) Mar‐14(E) Mar‐15(E)Balance as per Profit and Loss Account(Beginning Balance) 80042 100499 118885 137232 160386 187619Profit After Tax 24976 23206 23652 29507 34680 41802Dividends Declared 1733 1610 1641 2047 2406 2900Corporate Dividend Tax 288 268 273 340 400 482General Reserve Account (Beginning Balance) 9430 11928 14870 18261 22227 26867Balance as per Profit and Loss Account(Ending Balance) 100499 118885 137232 160386 187619 220581General Reserve Account (Ending Balance) 11928 14870 18261 22227 26867 32324


12 March 25, 2011

Appendix 7: Forecasted FCFF and ROIC*

(In Rs. Million) Mar‐10 Mar‐11(E) Mar‐12(E) Mar‐13(E) Mar‐14(E) Mar‐15(E) Mar‐16(E) Mar‐17(E) Mar‐18(E) Mar‐19(E) Mar‐20(E) Mar‐21(E) Mar‐22(E) Mar‐23(E) Mar‐24(E) Mar‐25(E) Mar‐26(E)EBITA 31439 28278 27555 33733 39554 47787 57958 71643 84301 95969 110156 122845 134410 138718 150130 160392 174857NOPLAT 21513 19385 18902 23139 27132 32779 39755 49140 57826 65833 75565 84274 92211 95176 103002 110044 119964Gross Cash Flow 29728 29493 31773 37850 44761 53588 64717 79315 94878 109994 126559 142916 158255 168122 180027 192706 208413Free Cash Flow 17767 2559 10588 9495 12262 13358 15575 16984 24585 33883 39799 49666 59938 76101 76642 82989 85506ROIC 51.3% 37.1% 29.2% 30.5% 30.1% 30.6% 30.8% 31.3% 30.5% 29.6% 29.5% 28.9% 28.4% 27.1% 27.6% 27.5% 27.8%

*NOPLAT = Net operating profit less adjusted taxes

ROIC = Return on invested capital


13 March 25, 2011

Th i s documen t i s no t fo r pub l i c d i s t r i bu t i on and has been fu rn ished to you so le l y fo r you r i n fo rma t i on and must no t be reproduced or r ed i s t r i bu ted to any o the r person . Persons i n to whose possess ion th i s documen t may come a re requ i red to observe these res t r i c t i ons .

Th is mater ia l i s f o r the persona l i n forma t ion o f t he au thor i zed r ec ip ien t , and we a re no t so l i c i t i ng any ac t i on based upon i t . Th i s repor t i s no t t o be cons t r ued as an o f fe r to se l l o r t he so l i c i t a t i on o f an o f fe r t o buy any secur i t y i n any j u r i sd i c t i on where such an o f fe r o r s o l i c i t a t i on wou ld be i l l ega l . I t i s fo r t he genera l i n fo rma t ion o f c l i en ts o f PRATIBHUTI , ITS ASSOCIATES AND GROUP. I t does no t cons t i t u te a persona l recommenda t i on or t ake in to accoun t t he par t i cu la r i nves tment ob jec t i ves , f i nanc ia l s i t ua t ions , o r needs o f ind i v i dua l c l i en ts .

W e have rev iewed the repo r t , and i n so fa r as i t i nc ludes cur ren t or h is to r i ca l i n forma t ion , i t i s be l i eved to be r e l i ab le though i t s accuracy o r comp le teness canno t be guaran teed . Ne i ther PRATIBHUTI , ITS ASSOCIATES AND GROUP no r any person connec ted w i th i t , accep ts any l i ab i l i t y a r i s i ng f rom the use o f th is document . The rec i p ien ts o f th is mater ia l shou ld re l y on the i r own inves t i ga t i ons and take the i r own p ro fess iona l adv i ce . Pr i ce and va lue o f the i nves tments r e fe r red to i n th is mater ia l may go up o r down . Pas t pe r fo rmance i s no t a gu ide fo r f u ture pe r fo rmance. Cer ta in t r ansac t ions - i nc lud ing those invo lv i ng fu tu res , op t i ons and o the r der i va t i ves as we l l as non - inves tment grade secur i t i es - i nvo lve subs tan t i a l r i sk and a re no t su i tab le fo r a l l i nves to rs . Repor ts based on techn ica l ana lys is cen te rs on s tudy ing char ts o f a s tock ' s p r i ce movemen t and t rad ing vo lume, as opposed to focus ing on a company 's fundamenta ls and as such , may no t match w i th a repor t on a company 's fundamenta ls .

Op in ions exp ressed are our cur ren t op in ions as o f the da te appear ing on th is ma ter ia l on l y . W hi le we endeavor to update on a r easonab le bas is the i n fo rmat ion d i scussed in th i s ma ter ia l , t here may be regu la to ry , compl iance , o r o the r reasons tha t p reven t us f rom do ing so . Prospec t i ve i nves tors and o thers a re cau t ioned that any fo rward - l ook ing s ta tements are no t p red ic t i ons and may be sub jec t to change wi thou t no t i ce . Our p ropr ie ta ry t r ad ing and inves tmen t bus inesses may make inves tment dec i s ions tha t a re i ncons is ten t w i th the recommendat ions exp ressed here i n .

W e and our a f f i l i a tes , o f f i ce rs , d i rec to rs , and employees wor ldw ide may: (a ) f rom t ime to t ime, have l ong o r shor t pos i t i ons i n , and buy o r se l l t he secur i t i es thereo f , o f company ( i es ) men t ioned here i n o r (b ) be engaged i n any o ther t ransac t i on invo l v ing such secur i t i es and ea rn b rokerage o r o ther compensat i on o r ac t as a marke t maker in t he f inanc ia l i ns t rumen ts o f t he company ( i es ) d iscussed here in o r ac t as adv iso r o r l ender / bor rower to such company ( i es ) o r have o ther poten t ia l conf l i c t o f i n te res t w i th respec t t o any r ecommendat ion and re la ted i n fo rma t ion and op in ions .

The ana lys t fo r th is repor t ce r t i f i es tha t a l l o f the v i ews exp ressed in th i s repor t accura te l y re f l ec t h i s o r her persona l v iews about the sub jec t company o r compan ies and i t s o r the i r sec ur i t i es , and no par t o f h i s o r her compensat ion was , is o r w i l l be , d i rec t l y o r i nd i rec t l y r e l a ted to spec i f i c recommendat ions o r v iews e xp ressed in th i s r epor t . No pa r t o f th is mater ia l may be dup l i ca ted i n any fo rm and /or red i s t r ibu ted w i thou t PRATIBHUTI , ITS ASSOCIATES AND GR OUP’ p r io r wr i t t en consent . Th is documen t i s no t fo r pub l i c d is t r i bu t i on and has been fu rn ished to you so le l y fo r your i n fo rma t ion and mus t no t be rep roduced o r red i s t r i bu ted to any o the r person . Persons i n to whose possess ion th i s documen t may come are requ i red to observe these res t r i c t i ons .

Pratibhuti Regd. & Adm. Off: 3rd Floor, 28 Rajabahadur Mansion, Mumbai Samachar Marg, Fort, Mumbai – 400 001. India. Tel: +91 22 6521 4836 Fax: +91 22 2265 6905

Corporate Off: Gr. Floor, 11, Raheja Centre, Free Press Marg, Nariman Point, Mumbai – 400 021. India. Tel: +91 22 6148 5700 Fax: +91 22 6148 5750

E-mail: Website:

[email protected] www.pratibhuti.com

Disclaimer

Contact Details

maruti suzuki india limited. - pratibhuti

Documents