Buy Maruti Suzuki India, target price Rs 8600: Emkay Global

Emkay Global has buy call on Maruti Suzuki India with a target price of Rs 8600. The current market price of Maruti Suzuki India is Rs 6916.6.

Time period given by analyst is one year when Maruti Suzuki India Ltd. price can reach defined target.

Maruti Suzuki India Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 208518.31 Crore) operating in Auto sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 18284.30 Crore, down -24.21 % from last quarter Total Income of Rs 24124.20 Crore and up 236.79 % from last year same quarter Total Income of Rs 5429.00 Crore. Company reported net profit after tax of Rs 439.10 Crore in latest quarter.

Investment Rationale
The brokerage reduces FY22/23 volume growth estimates by 15%/7% but retain the FY24 forecast. Following the revision, it expects revenue/earnings CAGR of 24%/61% over FY22- 24E. It lowers Sep’22 TP to Rs8,600 (Rs9,000 earlier), based on 28x core P/E and net cash/share of Rs1,541. Its core P/E is backed by a DCF model. Key risks: delay in economic recovery; a third Covid-19 wave leading to another round of lockdowns; failure of new products; increase in competitive intensity; and adverse movement in currency/commodity prices.

Promoter/FII Holdings
Promoters held 56.4 per cent stake in the company as of June 30, 2021, while FIIs held 22.9 per cent, DIIs 15.8 per cent and public and others 5 per cent.