Dolat Capital: Maruti Suzuki’s Disappointing Numbers In Q1, Valuation Leaves Little Upside

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Maruti Suzuki India Ltd.’s Q1 FY21 result outcome was disappointing with significantly higher Ebitda loss of Rs 8.6 billion (versus estimated loss of Rs 2.62 billion) due to higher discounts (Rs 25,000 per vehicle) and negative operating leverage.While personal vehicles demand is back to 85-90% of pre-Covid 19 level, the management believes broad-based recovery is still elusive as it is difficult to predict if the current demand is pent up in nature.Majority of customers are first-time buyers for entry segment cars. Currently, replacement demand is weak as buyers are postponing discretionary purchases.While macro level deterioration, supply chain disruption (current production is 4,000 vehicle per day) and falling discretionary sentiment remain overhangs, the company’s strong rural presence (approximately 40% of sales) and low system inventory (85,000 vehicle per 25 days), provides near term hope for volume recovery in festive season..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Dolat Capital: Maruti Suzuki’s Disappointing Numbers In Q1, Valuation Leaves Little Upside

Dolat Capital: Maruti Suzuki’s Disappointing Numbers In Q1, Valuation Leaves Little Upside

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