3QFY2013 Result Update | Automobile

January 25, 2013

Maruti Suzuki
Performance Highlights
Y/E March (` cr) Net Sales EBITDA EBITDA Margin (%) Adj. PAT 3QFY13 11,200 891 8.0 501 3QFY12 7,732 403 5.2 206 % chg (yoy) 44.9 121.1 274bp 143.8 2QFY13 8,305 509 6.1 227 % chg (qoq) 34.9 75.3 183bp 120.4

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Automobile 40,291 (7,109) 0.8 1,428/906 86,683 5 18,431 5,598 MRTI.BO MSIL@IN

`1,600 -

Source: Company, Angel Research

Maruti Suzuki (MSIL) reported strong results for 3QFY2013. While the top-line (up 35% qoq) was broadly in-line with our estimates, the bottom-line was slightly ahead despite the higher tax rate (at 26% as against 19% in 2QFY2013), driven by EBITDA margin expansion of 183bp sequentially to 8%. The margin expansion was led by superior product-mix (higher share of Swift, Dzire and Ertiga and higher proportion of diesel vehicles in the product-mix), lower discounts (at `12,100/unit vs `14,700/unit in 2QFY2013), price hikes and favorable currency movement. Going ahead, we expect MSIL to post a modest volume growth of ~2% in FY2013; however, we expect volumes to rebound in FY2014 and post a growth of 13% driven by availability of additional diesel engines and revival in demand for petrol cars. We also expect operating margins to improve ~140bp in FY2014 led by a favorable product-mix and currency movement, lower discounts and ongoing cost reduction initiatives. Nonetheless, post the sharp run-up in the stock price (up ~18%) over the last three months; the stock appears to be fairly valued. Thus we maintain our Neutral rating on the stock. Strong results for 3QFY2013: For 3QFY2013, net sales grew by a robust 44.9% yoy (34.9% qoq) to `11,200cr, driven by 25.9% yoy (30.9% qoq) and 15.7% yoy (3.8% qoq) growth in volumes and net average realization respectively. While volume growth came on the back of the low base (volumes in 3QFY2012 and 2QFY2013 were impacted due to labor strike); net average realization improved on account of superior product-mix, lower discounts and price hikes. The share of diesel vehicles stood at ~40% in 3QFY2013 as against ~33% in 2QFY2013. On the operating front, margins improved 183bp sequentially to 8% primarily due to favorable product-mix, operating leverage benefits and favorable currency movement. The royalty expense for the quarter stood at 5.6% as against 6% in 3QFY2012. Led by strong operating performance and base effect, net profit surged 143.8% yoy (120.4% qoq) to `501cr, ahead of our estimates of `474cr. Outlook and valuation: At `1,600, MSIL is trading at a rich valuation of 16.7x FY2014E earnings. We therefore maintain our Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 54.2 22.4 20.5 2.9

Abs. (%) Sensex Maruti Suzuki

3m 7.5 24.5

1yr 3.5 23.6

3yr 11.0 (0.6)

Key financials (Standalone)

Y/E March (` cr) Net Sales % chg Net Profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2011 36,618 25.8 2,252 (6.9) 9.9 79.2 20.5 3.3 17.5 19.3 0.9 10.7

FY2012 35,587 (2.8) 1,461 (35.1) 7.1 56.6 31.6 3.0 10.1 8.8 1.0 15.4

FY2013E 42,304 18.9 1,860 27.3 7.5 64.4 24.9 2.8 11.6 10.1 0.8 12.1

FY2014E 51,088 20.8 2,764 48.6 8.9 95.6 16.7 2.4 15.3 14.9 0.6 8.0

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 1: Quarterly financial performance (Standalone)

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchases of TG (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM (%) Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT Adj PAT Adj. PATM Equity capital (cr) Reported EPS (`)
Source: Company, Angel Research

3QFY13 11,200 8,217 73.4 241 2.2 567 5.1 1,284 11.5 10,309 891 8.0 46 358 189 676 676 6.0 174 25.8 501 501 4.5 144.5 17.4

3QFY12 7,732 5,748 74.3 209 2.7 366 4.7 1,005 13.0 7,328 403 5.2 18 299 175 261 261 3.4 56 21.3 206 206 2.7 144.5 7.1

% chg (yoy) 44.9 43.0 15.4 54.7 27.7 40.7 121.1 161.1 19.9 8.0 158.6 158.6 213.1 143.8 143.8

2QFY13 8,305 6,117 73.7 235 2.8 494 5.9 951 11.4 7,797 509 6.1 38 347 156 280 280 3.4 52 18.7 227 227 2.7 144.5

% chg (qoq) 34.9 34.3 2.6 14.8 35.0 32.2 75.3 20.8 3.3 20.7 141.5 141.5 232.9 120.4 120.4

9MFY13 30,284 22,264 73.5 715 2.4 1,521 5.0 3,598 11.9 28,098 2,186 7.2 117 1,045 457 1,481 1,481 4.9 328 22.2 1,153 1,153 3.8 144.5

9MFY12 23,860 17,613 73.8 588 2.5 1,120 4.7 2,885 12.1 22,206 1,654 6.9 34 808 530 1,342 1,342 5.6 347 25.8 995 995 4.2 144.5 34.4

% chg (yoy) 26.9 26.4 21.6 35.8 24.7 26.5 32.2 241.8 29.4 (13.7) 10.3 10.3 (5.3) 15.8 15.8

143.8

7.9

120.4

39.9

15.8

Exhibit 2: 3QFY2013 Actual vs Angel estimates

Y/E March (` cr) Net Sales EBITDA EBITDA margin (%) Adj. PAT
Source: Company, Angel Research

Actual 11,200 891 8.0 501

Estimates 11,173 842 7.5 474

Variation (%) 0.2 5.8 42bp 5.7

January 25, 2013

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 3: Quarterly volume performance

Volume (units) A: Mini: M800, Alto, A-Star, WagonR A: Compact: Swift, Estilo, Ritz A: Super Compact: Dzire A: Mid-Size: SX4 A: Executive: Kizashi Total Passenger cars B: Utility Vehicles: Gypsy, Grand Vitara C: Vans: Omni, Eeco Total Domestic Total Exports Total Volume
Source: Company, Angel Research

3QFY13 111,709 68,790 40,967 1,716 151 223,333 20,286 25,338 268,957 32,496 301,453

3QFY12 102,523 53,671 24,593 2,596 216 183,599 688 27,516 211,803 27,725 239,528

% chg (yoy) 9.0 28.2 66.6 (33.9) 21.6 2,848.5 (7.9) 27.0 17.2 25.9

2QFY13 90,210 39,631 26,192 1,414 14 157,461 21,401 31,092 209,954 20,422 230,376

% chg (qoq) 23.8 73.6 56.4 21.4 978.6 41.8 (5.2) (18.5) 28.1 59.1 30.9

9MFY13 296,732 181,407 114,117 4,577 186 597,019 60,652 84,504 742,175 85,550 827,725

9MFY12 % chg (yoy) 337,423 154,186 69,976 12,505 387 574,477 4,534 105,881 684,892 88,469 773,361 (12.1) 17.7 63.1 (63.4) 3.9 1,237.7 (20.2) 8.4 (3.3) 7.0

Strong top-line growth of 44.9% yoy: For 3QFY2013, net sales grew by a robust 44.9% yoy (34.9% qoq) to `11,200cr which was in-line with our estimates, driven by a 25.9% yoy (30.9% qoq) and 15.7% yoy (3.8% qoq) growth in volumes and net average realization respectively. While volume growth came on the back of the low base (volumes in 3QFY2012 and 2QFY2013 were impacted by a labor strike); net average realization improved on account of superior product-mix (higher share of Swift, Dzire and Ertiga and higher proportion of diesel vehicles in the product-mix), lower discounts (at `12,100/unit vs `14,700/unit in 2QFY2013) and price hikes. The share of diesel vehicles stood at ~40% in 3QFY2013 as against ~33% in 2QFY2013. The export revenue for the quarter stood at `1,320cr (up 40.7% yoy), driven by a strong volume growth of 17.2% yoy (59.1% mom) and net average realization growth of 20.1% yoy. The exports performance benefitted from the sales of Ertiga kits to Indonesia and favorable forex movement.

Exhibit 4: Strong volume growth of 25.9% yoy

(units) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
(19.6) (27.6) (0.6) 330,687 28.2 19.5

Exhibit 5: Net average realization surges 15.7% yoy

(%) 40.0 30.0 20.0 10.0 0.0 (10.0) (`) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
(1.3) (0.4) 3.2 3.4 12.0 11.7

Total volume
343,350

yoy growth (RHS)

360,334 295,896 301,453 25.9

Net average realisation/unit

yoy growth (RHS)

21.3 18.9 15.7

(%) 25.0 20.0 15.0 10.0 5.0 0.0 (5.0)

281,526 252,307 239,528 4.9

230,376 5.1 (8.7)

(20.0) (30.0) (40.0)

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

3QFY13

Source: Company, Angel Research

January 25, 2013

3QFY13

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 6: In-line growth in net sales

(` cr) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
9,494 10,005 8,454

Exhibit 7: Domestic passenger car market share trend

44.9 (%) 50.0 40.0 30.0 8.2 20.0 10.0 0.0 (10.0) (20.0) (30.0) (%) 60.0 50.0 40.0 30.0 20.0 10.0 0.0 52.2

Net sales

yoy change (RHS)

26.5 18.8 2.7 (16.1) (18.6)

7,674

27.5 17.2

48.0

44.7

40.9

38.7

44.7

44.1

47.3 37.6

7,732 11,727 10,778 8,305 11,200

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

3QFY13

Source: Company, SIAM, Angel Research

Exhibit 8: Quarterly revenue and realization performance

1QFY12 Domestic revenue (` cr) Change yoy (%) Domestic realization (`) Change yoy (%) Export revenue (` cr) Change yoy (%) Export realization (`) Change yoy (%)
Source: Company, Angel Research

2QFY12 6,547 (17.6) 294,367 3.0 889 (10.4) 297,314 7.1

3QFY12 6,589 (21.9) 311,096 10.4 938 11.8 338,323 25.7

4QFY12 10,242 14.7 318,656 11.5 1,244 43.0 319,712 13.7

1QFY13 9,429 27.6 358,165 21.5 1,100 26.9 337,092 19.9

2QFY13 6,612 1.0 314,921 7.0 824 (7.3) 403,486 35.7

3QFY13 9,637 46.3 358,310 15.2 1,320 40.7 406,204 20.1

7,390 6.8 294,779 3.5 867 (23.3) 281,101 0.6

Strong operating performance led by EBITDA margin expansion: MSILs EBITDA margin improved 183bp sequentially to 8%, primarily due to favorable product-mix, operating leverage benefits and favorable currency movement. The raw-material cost as a percentage of sales declined 117bp qoq to 78.4%, led largely by better product-mix (towards Swift, Dzire and Ertiga and towards diesel vehicles), lower discounts and ongoing cost reduction initiatives. The employee expense as a percentage of sales too declined 60bp qoq during the quarter. On a sequential basis, EBITDA margin improved 274bp primarily due to 150bp decline in other expenditure as a percentage of sales driven by favorable foreign exchange movement which led to lower royalty outgo (down 40bp yoy to 5.6%) and operating leverage benefits. As a result, the operating profit surged 121.1% yoy (75.3% qoq to `891cr.

January 25, 2013

3QFY13

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 9: EBITDA margin improves to 8%

(%) 100.0 80.0 60.0 40.0 20.0 0.0 9.5 10.1 9.6 5.7 5.2 7.3 7.3 6.1 8.0 5.2 5.1 6.0 4.8 EBITDA margin Royalty expenses/sales (RHS) 80.3 79.2 79.9 81.0 79.1 6.0 Raw material cost/sales (%) 7.0 78.4 5.6 6.0 5.0 4.0 3.0 2.0 1.0 0.0

Exhibit 10: Net profit slightly higher than expected

(` cr) 700 600 500 400 300 200 100 0
565 660 549 240 206 640 424 227 501

Net profit 6.6 6.5

Net profit margin (RHS)

(%) 8.0 7.0

81.3

79.7 6.2

79.6 5.4

6.0

5.5 3.9 3.1 2.7 2.7 4.5

6.0 5.0 4.0 3.0 2.0 1.0 0.0

5.1

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Slightly better-than expected growth in bottom-line: Led by strong operating performance and due to base effect, net profit surged 143.8% yoy (120.4% qoq) to `501cr, which was slightly ahead of our estimates of `474cr. This was despite the higher tax rate (at 25.8% as against 18.7% in 2QFY2013 and 21.3% in 3QFY2012) during the quarter.

January 25, 2013

3QFY13

Maruti Suzuki | 3QFY2013 Result Update

Investment arguments
Per capita car penetration near inflexion point: In FY2009, car penetration in India was estimated at around 12 vehicles/1,000 people compared to around 21 vehicles/1,000 people in China. Moreover, Indias PPP-based per capita is estimated to approach US$5,000 over the next four to five years, which is expected to be the inflexion point for the countrys car demand. Further, MSIL has a sizeable competitive advantage over new foreign entrants due to its widespread distribution network (nearly 3,000 and 1,000 service and sales outlets, respectively), which is not easy to replicate. Suzuki focusing to make Maruti a small car manufacturing hub: Suzuki Japan is making Maruti a manufacturing hub to cater to the increasing global demand for small cars due to rising fuel prices and stricter emission standards. Thus, we believe there is a huge potential for the company to increase its market share in the export market. Moreover, R&D capabilities, so far largely housed at Suzuki Japan, are progressively moving to MSIL. The company is aiming to achieve full model change capabilities over the next couple of years, which will enable it to launch new models and variants at a much faster pace. This is expected to reduce its royalty payment in the medium-term (2-3 years). Merger with SPIL to be positive in the long run: MSIL is set to merge its associate company, Suzuki Power Train (SPIL) with itself. SPIL, a 70:30 JV between Suzuki Motor Corporation (SMC), Japan, and MSIL, manufactures and supplies diesel engines and transmission components for vehicles. SPIL currently supplies ~90% of its production to MSIL. We believe the merger of SPIL with MSIL is positive for MSIL given that MSIL itself is setting up a new diesel engine facility (capacity of 300,000 units by FY2014) in Gurgaon. Further, with increasing trend of dieselization, the integration of SPIL will result in better control over diesel engine sourcing, flexibility in production planning, and managing fluctuations in market demand. Additionally, single management control of diesel engine operations will result in better sourcing, localization and cost-reduction. While the merger is accretive for MSIL, we are not yet factoring it in our financials and valuations.

Outlook and valuation

Going ahead, we expect MSIL to post a modest volumes growth of ~2% in FY2013; however, we expect volumes to rebound in FY2014 and post a growth of 13%, driven by availability of additional diesel engines and revival in demand for petrol cars. We also expect operating margin to improve ~140bp in FY2014 led by a favorable product-mix and currency movement, lower discounts and ongoing cost reduction initiatives. We broadly retain our top-line estimates for the company for FY2013E/14E. However, our earnings estimates for FY2013 are revised marginally downwards as we increase our tax rate assumption for FY2013 to factor in the higher tax-rate that the company was subjected to during 3QFY2013.

January 25, 2013

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 11: Change in estimates

Y/E March Net Sales (` cr) OPM (%) EPS (`)
Source: Company, Angel Research

Earlier Estimates 42,500 7.5 67.3 51,000 8.6 94.0

Revised Estimates 42,304 7.5 64.4 51,088 8.9 95.6

% chg (0.5) 4 bp (4.3) 0.2 30 bp 1.8

FY2013E FY2014E FY2013E FY2014E FY2013E FY2014E

We continue to remain positive on long-term volume growth in the passenger car industry, driven by economic growth and low penetration levels in the country. Nonetheless, post the sharp run-up in the stock price (up ~18%) over the last three months; the stock appears to be fairly valued. At `1,600, MSIL is trading at a rich valuation of 16.7x FY2014E earnings. We therefore maintain our Neutral rating on the stock.

Exhibit 12: Key assumptions

Y/E March (units) A1: Maruti 800 C: Omni, Versa, Eeco A2: Alto, WagonR, Zen, Swift, A Star, Ritz A3 : SX4, Dzire A4: Kizashi Total passenger cars MUV: Gypsy, Vitara, Ertiga Total domestic Total export Total sales % yoy chg.
Source: Company, Angel Research

FY09 49,383 77,948 511,396 75,928 714,655 7,489 722,144 70,023 792,167 3.6

FY10 33,028 101,325 633,190 99,315 866,858 3,932 870,790 147,557 1,018,347 28.6

FY11 26,485 160,626 808,552 131,282 138 1,127,083 5,666 1,132,749 138,266 1,271,015 24.8

FY12 20,000 144,061 707,143 128,129 458 999,791 6,525 1,006,316 127,379 1,133,695 (10.8)

FY13E 18,000 115,249 650,572 162,724 321 946,865 82,215 1,029,080 126,487 1,155,567 1.9

FY14E 17,100 126,774 748,157 182,251 385 1,074,666 92,081 1,166,747 139,136 1,305,883 13.0

Exhibit 13: Angel vs consensus forecast

Angel estimates FY13E Total op. income (` cr) EPS (`) 42,304 64.4 FY14E 51,088 95.6 Consensus FY13E 42,433 67.0 FY14E 50,157 97.2 Variation (%) FY13E (0.3) (3.9) FY14E 1.9 (1.6)

Source: Bloomberg, Angel Research

January 25, 2013

Maruti Suzuki | 3QFY2013 Result Update

Exhibit 14: One-year forward P/E band

(`) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Share price (`) 5x 10x 15x 20x

Exhibit 15: One-year forward P/E chart

(x) 30 25 20 15 10 5 0 Absolute P/E Five-yr average P/E

Jun-07

Jan-05

Jan-09

Jun-11

Aug-06

Mar-08

Aug-10

Apr-04

Nov-05

Mar-12

Oct-09

Jan-13

Jun-07

Jan-05

Jan-09

Jun-11

Aug-06

Mar-08

Aug-10

Apr-04

Nov-05

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 16: One-year forward EV/EBITDA band

(`cr) 60,000 50,000 40,000 30,000 20,000 10,000 0 EV (` cr) 7x 9x 11x 13x

Exhibit 17: Premium/Discount to Sensex P/E

(%) 80 60 40 20 0 (20) (40) (60) Absolute premium Five-yr average premium

Jun-07

Jan-05

Aug-06

Jan-09

Jun-11

Mar-12 Mar-12

Oct-09

Nov-05

Mar-08

Jun-07

Jan-05

Jan-09

Jun-11

Aug-06

Mar-08

Aug-10

Nov-05

Source: Company, Angel Research

Mar-12

Apr-04

Oct-09

Jan-13

Source: Company, Angel Research

Exhibit 18: Automobile - Recommendation summary

Company Ashok Leyland Bajaj Auto Hero MotoCorp Maruti Suzuki Mahi. & Mahi. Tata Motors TVS Motor Reco. Accumulate Neutral Accumulate Neutral Accumulate Accumulate Accumulate CMP Tgt. price (`) (`) 25 2,079 1,764 1,600 900 301 43 28 1,923 998 337 46 Upside (%) 13.9 9.0 10.9 10.3 8.0 P/E (x) FY13E 16.9 19.3 16.7 24.9 16.5 8.5 9.5 FY14E 11.2 16.5 14.7 16.7 14.5 7.1 7.4 EV/EBITDA (x) FY13E 6.7 13.6 8.4 12.1 9.5 4.6 4.0 FY14E 5.5 11.1 6.9 8.0 7.9 3.9 3.1 RoE (%) FY13E 9.3 45.8 44.3 11.6 24.2 30.2 17.4 FY14E 13.4 42.8 40.9 15.3 23.2 27.6 19.4 FY12-14E EPS CAGR (%) 2.7 8.9 5.3 37.5 15.3 12.3 5.3

Source: Company, Angel Research

Company background
Maruti Suzuki (MSIL), a subsidiary of Suzuki Motor Corporation, Japan (with a 54.2% stake), is the largest passenger car (PC) company in India, accounting for 42.4% of the domestic passenger car market. MSIL derives ~75% of its overall sales from the small car segment and has a dominant position in the segment with a market share of ~50%, led by popular models like Alto, Wagon R and Swift. The company operates from two facilities in India (Gurgaon and Manesar) and is in the process of expanding its manufacturing capacity to 1.9mn units (currently 1.65mn) by FY2014. Also, MSIL has steadily increased its presence internationally and exports now account for ~11% of its overall sales volume.

January 25, 2013

Aug-10

Apr-04

Oct-09

Jan-13

Jan-13

Maruti Suzuki | 3QFY2013 Result Update

Profit and loss statement (Standalone)

Y/E March (` cr) Total operating income % chg Total expenditure Net raw material costs Other mfg costs Employee expenses Other EBITDA % chg (% of total op. income) Depreciation & amortization EBIT % chg (% of total op. income) Interest and other charges Other income Recurring PBT % chg Extraordinary income/ (expense) PBT Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of total op. income) Basic EPS (`) Adj. EPS (`) % chg FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 20,454 29,099 36,618 35,587 14.3 42.3 25.8 (2.8) 19,021 25,672 32,980 33,074 16,045 22,170 28,364 28,108 448 464 2,064 1,433 (37.5) 7.0 707 727 (57.9) 3.6 51 1,000 1,676 (33.0) (146) 1,530 457 29.9 1,219 1,073 (35.8) 5.2 42.2 37.1 (35.8) 526 538 2,439 3,427 139.1 11.8 825 2,602 258.0 8.9 34 1,024 3,593 114.4 (79) 3,514 1,095 31.2 2,498 2,419 125.5 8.3 86.4 83.7 125.5 365 704 3,547 3,639 6.2 9.9 1,014 2,625 0.9 7.2 25 509 3,109 (13.5) (36) 3,073 820 26.7 2,289 2,252 (6.9) 6.2 79.2 77.9 (6.9) 411 844 3,711 2,513 (30.9) 7.1 1,138 1,375 (47.6) 3.9 55 827 2,146 (31.0) (174) 1,972 511 25.9 1,635 1,461 (35.1) 4.1 56.6 50.6 (35.1) 42,304 18.9 39,115 33,124 508 1,142 4,340 3,190 26.9 7.5 1,404 1,786 29.9 4.2 162 761 2,385 11.1 2,385 525 22.0 1,860 1,860 27.3 4.4 64.4 64.4 27.3 51,088 20.8 46,521 39,338 613 1,405 5,165 4,567 43.2 8.9 1,629 2,938 64.5 5.8 162 837 3,613 51.5 3,613 849 23.5 2,764 2,764 48.6 5.4 95.6 95.6 48.6

January 25, 2013

Maruti Suzuki | 3QFY2013 Result Update

Balance sheet statement (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders Funds Total loans Deferred tax liability Other long term liabilities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Investments Long term loans and advances Other noncurrent assets Current assets Cash Loans & advances Other Current liabilities Net current assets Total Assets 8,721 10,407 11,738 14,735 4,650 4,071 861 3,173 5,510 1,939 1,731 1,840 3,417 2,094 5,382 5,025 388 7,177 3,772 98 1,656 2,019 3,568 205 6,208 5,529 863 5,107 1,255 47 5,625 2,509 877 2,240 3,988 1,637 7,214 7,521 611 6,147 1,672 26 6,325 2,436 1,155 2,734 5,469 855 16,912 8,618 8,295 1,184 6,735 1,672 26 6,368 2,024 1,354 2,991 5,838 530 18,441 19,625 10,247 9,379 1,374 7,653 1,672 26 8,136 2,913 1,635 3,589 7,285 851 20,954 145 145 145 145 145 16,651 16,796 1,078 302 97 168 18,441 145 19,164 19,308 1,078 302 97 168 20,954 9,200 11,691 13,723 15,042 9,345 11,835 13,868 15,187 699 155 821 137 170 164 96 140 1,078 302 97 168 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

10,199 12,794 14,438 16,832

10,199 12,794 14,438 16,832

January 25, 2013

10

Maruti Suzuki | 3QFY2013 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in working capital Others Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in fixed assets (Inc.)/Dec. in investments Other income Cash Flow from Investing Issue of equity Inc./(Dec.) in loans Dividend paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in cash Opening Cash balances Closing Cash balances FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E 1,530 707 (624) 1,038 (1,000) (457) 1,193 (1,560) 2,007 1,000 1,447 (201) 118 (949) (1,032) 1,608 331 1,939 3,514 825 48 764 (1,024) (1,095) 3,032 (1,212) (4,003) 1,024 (4,191) 123 202 (1,006) (681) (1,841) 1,939 98 3,073 1,014 150 (88) (509) (820) 2,819 (1,806) 2,070 509 773 (651) 252 (783) (1,182) 2,410 98 2,508 1,972 1,138 (104) 561 (827) (511) 2,229 (2,746) (1,041) 827 (2,960) 908 252 (502) 658 (72) 2,508 2,436 2,385 1,404 (87) (761) (525) 2,417 (2,750) (588) 761 (2,577) 252 (252) (412) 2,436 2,024 3,613 1,629 568 (837) (849) 4,125 (2,903) (918) 837 (2,984) 252 (252) 889 2,024 2,913

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Maruti Suzuki | 3QFY2013 Result Update

Key ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.) (0.5) (3.1) 14.2 (0.5) (1.9) 77.7 (0.5) (2.0) 105.0 (0.5) (3.0) 24.9 (0.5) (2.4) 11.0 (0.5) (2.1) 18.2 2.6 17 14 49 1 3.0 13 11 37 2 3.3 13 8 33 (4) 2.7 16 9 44 (13) 2.7 17 9 44 (13) 2.8 17 9 43 (13) 7.4 14.3 12.1 22.6 47.1 22.8 19.3 38.5 17.5 8.8 16.7 10.1 10.1 18.4 11.6 14.9 16.3 15.3 3.6 0.7 4.5 11.2 4.5 0.0 11.2 8.9 0.7 5.5 33.8 3.0 0.0 33.8 7.2 0.7 5.9 31.2 3.7 0.0 31.2 3.9 0.7 4.7 13.5 6.6 0.0 13.5 4.2 0.8 4.7 15.5 11.7 0.0 15.5 5.8 0.8 3.7 16.2 11.5 0.0 16.2 42.2 37.1 66.6 3.5 323.4 86.4 83.7 112.2 6.0 409.5 79.2 77.9 113.0 7.5 479.8 56.6 50.6 89.9 7.5 525.5 64.4 64.4 112.9 7.5 581.2 95.6 95.6 152.0 7.5 668.1 43.1 24.0 4.9 0.2 1.8 29.2 4.4 19.1 14.3 3.9 0.4 1.2 11.6 3.9 20.5 14.2 3.3 0.5 0.9 10.7 3.0 31.6 17.8 3.0 0.5 1.0 15.4 2.7 24.9 14.2 2.8 0.5 0.8 12.1 2.3 16.7 10.5 2.4 0.5 0.6 8.0 2.0 FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

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Maruti Suzuki | 3QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Maruti Suzuki No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

January 25, 2013

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