Auto giant, Maruti Suzuki has announced its highest dividend payout to the tune of Rs 125 per share. This is also the highest dividend payout of 2024. This comes after the country's largest automaker posted 64% growth in net profit for FY24, and 48% growth in Q4. Accordingly, four brokerages have recommended buying Maruti Suzuki shares with a target price highest at Rs 14,700. Maruti is a crorepati-making stock as it journeyed from over Rs 170 to near the Rs 13,000 mark, giving an impressive 7,284% all-time gain.
Maruti Suzuki Share Price:
This auto stock ended April 2024 on a bullish note at Rs 12,806.45 crore on BSE. On April 30th, the stock was up by 1% with a market cap of Rs 4,02,638.08 crore. The stock's 52-week high and low is at Rs 13,066.85 apiece and Rs 8,605.30 apiece respectively. In April month, the stock gained by 2%, but year-to-date, the stock has rallied by 24.5%.
In a year, Maruti shares are up by 46%, while in 5-years, the stock zoomed by 91%. But its all-time gain is a whopping 7,283.91% so far. The stock was merely at Rs 173.35 apiece on July 11, 2003. If an investor invested Rs 1,50,000 in Maruti shares on July 11, 2003, their corpus is now worth Rs 1.1 crore or Rs 11,075,865.
Maruti Suzuki Dividend:
Maruti board has recommended a final dividend aggregating Rs 39,300 million i.e. Rs 125 per share (Nominal value INR 5.00 per share) (previous year Rs 27,187 million i.e. Rs 90 per share) for the financial year 2023'24 which is subject to the approval of the members at the ensuing Annual General Meeting. This is the highest dividend payout of Maruti and also of 2024.
Maruti Suzuki Q4 Results:
In Q4FY24, Maruti's net profit was at Rs 38,778 million, an increase of 47.8% over Rs 26,236 million in Q4FY2022-23. This was on account of higher sales volume, favourable commodity prices, cost reduction efforts and higher non-operating income. Its sales volume in the domestic market stood at 505,291 units, up by 12.2% over that in Q4FY2023-24. The sales volume in the export market was at 78,740 units, a growth of 21.7% over exports of 64,719 units in Q4FY2022-23. In the quarter, Maruti registered net sales of INR 366,975 million against Rs 308,218 million in the same period of the previous year.
For the full year, Maruti Suzuki achieved a net profit of Rs 132,094 million in FY2023-24, 64% higher than the net profit of Rs 80,492 million in FY2022-23. The Company was able to better its net profit on account of higher sales volume, favourable commodity prices, cost reduction efforts and higher non-operating income. While its net sales were at Rs 1,349,378 million in FY2023-24, a growth of 19.9% over the net sales of Rs 1,125,008 million in FY2022-23.
Maruti Suzuki Brokerages Recommendation:
Elara Capital On Maruti Suzuki:
While Q4 profitability was hit by one-off expenses and a lower CNG mix, we expect it to reverse. Realization per vehicle improved 10% YoY in FY24 (and ~37% versus FY21). This was led by the acceptance and success of MSIL's higher-priced brands in the UV segment. FY24 EBIT/ vehicle grew an impressive ~53% YoY to ~INR 62,655, ~20% more than the earlier peak in FY18. This is a testament to improving the product mix. While weakness in the entry-level car segment restricted the rise in volume market share to 60bps versus the FY23 level, the rise in revenue market share is encouraging at 220bps YoY, led by the success of the newly-launched, higher-priced models.
Key things to monitor which are triggers for the stock are: 1) the return of first-time car buyers (down to 40-43% in FY24 from a peak of 48%, 2) industry growth in FY25-26, and 3) Any hybrid tax cut. We increase FY25E-26E EPS by ~5-6% each and introduce FY27E estimates. We revise MSIL to Accumulate from Buy given the sharp ~27% rally in the stock price in the past three months. We raise TP to INR 13,722 (from INR 13,004 earlier) led by an upward revision of EPS estimates and PE of 26x (unchanged) FY26E P/E.
JM Financial On Maruti Suzuki:
MSIL, with back-to-back SUV launches, has strengthened its presence in the B-segment (regained leadership position with c.26% mkt. share). The company indicated that Strong Hybrids have been received well and it plans to launch this technology in multiple models going ahead. EV launch also remains on track. Healthy momentum in the Hybrids/CNG portfolio (total order backlog of 200k units) and new launches is expected to drive better than industry vol. growth.
The benefit of higher operating leverage and a richer portfolio mix is expected to support margins going ahead. We estimate revenue / EPS CAGR of 13% / 16% over FY24-26E. We ascribe 25x PE to arrive at a Mar'25 fair value of INR 14,250. Maintain BUY. Rationalisation of Hybrid taxation remains a key catalyst for re-rating. Revival in the entry-level segment remains a key monitorable.
Prabhudas Lilladher on Maruti Suzuki:
Our view on MSIL continues to remain positive owing to 1) strong traction in its UV portfolio which is leading to ASP and market share expansion. 2) Rise in disposable income, consumer shift towards UVs and improved supply chain leading to consistent demand. 3) Capacity expansion to cater to domestic as well as international markets. 4) Improved mix coupled with volume growth in the export market. Factoring this, we estimate its revenue/EBITDA/EPS to grow at a CAGR of 10.5%/18.3%/14.9% over FY24-26E. Hence, we maintain our buy rating with a target price of Rs 14,432 (previous Rs 14,350) valuing the company at 26x on its FY26E EPS.
Motilal Oswal On Maruti Suzuki:
Motilal has set the highest target on Maruti. It said:
We have marginally raised our FY25-26 estimates by 2-4%. As highlighted above, we expect MSIL to continue to outperform industry growth in FY25. While the bulk of input cost benefits are likely to be behind, we expect MSIL to post about 70bp margin improvement to ~12.5% in FY25, largely led by an improved mix. This would, in turn, drive a steady 13% earnings CAGR over FY24-26E.
Any GST cuts or favourable policy for hybrids by the government may drive a rerating as MSIL would be the key beneficiary of such changes. The stock trades at 25x/22.5x FY25E/FY26E consolidated EPS. Reiterate BUY with a TP of INR14,700 (premised on 26x FY26 EPS).
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