Inline Performance, ripe for comeback Maruti’s 1QFY20 results were broadly in line with our estimates, as lowerthan-expected EBIDTA margin at 10.4% (vs estimate of 11%) was offset by an increase in ASP. While MSIL’s net profit fell by 27% YoY in 1QFY20, but we still retain our faith in the company, given its dealership strength and strong product portfolio. We expect reduction in interest rate, pick-up in rural volume, and festive season to revive demand from 2HFY20. The company also bring down dealer inventory to comfortable four weeks. We lower our EPS estimate by 3/4% for FY20E/21E, factoring in slower-thanexpected ramp up in volume. We forecast a 10% EPS CAGR over FY19-21E, driven by a 3% volume growth and 110bps margin expansion. Given the company’s strong rural presence (39% of volume) and a healthy ROE/ROCE (17% each), with FCF of 180bn in FY19-21E (9% of current EV), we maintain Accumulate, with a lower TP of 6692 (based on 22x FY21E EPS).