Maruti Suzuki In­dia Ltd

The Hitavada - - BUSINESS -

WE THINK MSIL’s val­u­a­tions will con­tinue to re-rate go­ing into FY19 as con­cerns on ca­pac­ity con­straints/mar­gins hit on Gu­jarat plant are likely to be un­der­whelmed and PV mar­ket should re­cover back to dou­ble-digit growth over next two years. Model cy­cle at Maruti re­mains pow­er­ful with c35% of the port­fo­lio re­freshed thus far and this will get a boost post the launch of new Swift (4Q18) , fol­lowed by a new com­pact SUV and high-vol­ume mod­els Alto/WagonR in late 2018/early 2019. This should con­tinue to drive port­fo­lio pre­mi­u­miza­tion for the next three years. We think MSIL has enough levers to off­set com­mod­ity cost in­creases and hence ex­pect cy­cle high mar­gins of 11.5% and mar­ket share of ~50% to sus­tain over the next two years.

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