- The document provides financial data for Maruti Suzuki from March 2008 to the estimated March 2020, including revenues, expenses, profits, assets, liabilities, and other financial metrics.
- It shows steady annual revenue growth for Maruti Suzuki over this period, from around Rs. 18 billion in 2008 to an estimated Rs. 1,242.99 billion in 2020, with expenses also increasing but remaining a high percentage of total revenues.
- Profits have also increased substantially over time, with the net profit estimated at Rs. 161.58 billion for fiscal year ending March 2020, up significantly from Rs. 1,218.70 billion in 2008.
5. Mar-08
#REF!
Sum of Discounted FCFF 38778.45
Terminal Value (Growth 5%) 870102.5
Dicsounted Terminal Value (t=5) 620371
Value of company (Sum of Discounted FCFF+Discounted Terminal Value) 659149.5
Shares Outstanding 151
FCFF per share 4365.228
Current Market Price(31 March 2016) 3719
UPSIDE 17%
BUY CALL
9. Valuation Ratios
DATA Required 2015
CMP ON 31 MARCH 2016 3719.1 P/E 151.3214324
EPS ON 31 MARCH 2016 24.57748344 P/B 23.69133318
REVENUE ON 31 MARCH 2016 49,970.60 P/SALES RATIO 11.23829011
NO . O/S SHARE 151 PRICE TO CASH FLOW 87.60242411
NET WORTH 23,704.20 PRICE TO EARNING GROWTH RATIO 42.45430464
ANNUAL DIVIDEND 500.00 DIVIDEND YIELD 0.134441128
CASH FLOW FROM OPERATION 6410.6 MARKET CAP 561584.1
EPS GROWTH 33% ENTERPRISE VALUE 561422.2
SHORT TERM BORROWING 35.4 NET DEBT 161.9
LONG TERM BORROWING 144.8 EV/EBITDA 83.63333284
CASH & CASH EQUIVALENT 18.3 EV/SALES 11.23505021
EBITDA 6,712.90 EV/EBIT 132.3297506
Net Debt= SHORT TERM BORROWING+LONG TERM BORROWING-CASH & CASH EQUIVALENT
10. Analysis
Company Profiles:
Company 1: Maruti Suzuki: Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of
Japanese automobile and motorcycle manufacturer Suzuki Motor Corporation. As of January 2016, it had a market share of 47% of the Indian passenger car
market. Maruti Suzuki manufactures and sells popular cars such as the Alto, Swift, Zen, Celerio, Swift DZire, SX4 and Omni. The company is headquartered
at New Delhi.
Discounted Cash Flow Valuation
1. Revenue Growth: The revenue growth of the companies has been assumed as follows:
Company 1: Maruti Suzuki: Maruti Suzuki has an potential to grow with an average growth of 22-25 % and the car industry is going to give 5 million car
industry by 2020(as per live mint Dated : 26 Jul,2016) and on this basis the future operating revenue forecasting has been done with an growth rate of 18-22%.
According to sales estimates from analysts polled by Thomson-Reuters, the company is among the best with regard to growth. Maruti Suzuki India (MSIL)
maintained its leadership position with ~45% market share and its presence in the value for money segment, new launches and an extensive sales network,
getting a boost from reviving domestic demand and rising export volumes. With strong export growth and an expanding domestic market, we expect MSIL’s
net sales to grow at 18-22% CAGR.
2. The other financials are based on the revenue and the average/estimated of the last three –five years.
3. WACC (Weighted Average Cost of Capital) for all the three companies are calculated as follows:
WACC Calculation Maruti Suzuki
WACC 7%
Weight of Debt 30.0%
Weight of Equity 70.0%
After-tax Cost of Debt 2.1%
Corporate tax rate 29.0%
Cost of Debt 3.0%
11. Cost of Equity 9.1%
Adjusted Risk free Rate 5.0%
Annual inflation rate 9.0%
Country Risk Premium 1.5%
Risk free Rate 8.0%
Unlevered Beta 0.92
Market Premium 4.0%
4. Terminal Growth Rate Assumption: T growth rate is taken 5 % assumption for all the three companies.
5. After calculating the value of the company the following recommendation can be given for each of the companies:
Name of the Company FCFF/ Share
(Rs)
Current Market Price (Rs) Upside
(%)
Recommendation
Maruti Suzuki 4365.228347 3719 ( As on 31 March 2016) 17% BUY
This report has been prepared by Aakash Singh, MBA Finance Student (SIBM HYD) only for the learning purpose. It includes research analysis, projections, forecasts and other
predictive statements providing a basis for investment decisions. The views expressed therein are based solely on information available publicly/internal data/other reliable
sources believed to be true. The information is provided merely as a complementary service and do not constitute an offer, solicitation for the purchase or sale of any financial
instruments or neither me nor anyone responsible for the risk held by the investor.