Maruti Suzuki

Submitted By :
Mona Arora
Akhil Jain
Akarsh Singhal

NMIMS Mumbai
 Income Statement
(All data is in millions .)

Particular 2012A 2013 A 2014 A

A. Income
Sale of Products (Gross) 1,701.41 1,914.47 2,293.69
(-)Excise Duty - - -
Sale of Products (Net) 1,701.41 1,914.47 2,293.69
Other Operating Income
Revenue from Operations (Net) 1,701.41 1,914.47 2,293.69
Other Revenue 11.80 7.25 6.63
Total Revenue 1,713.21 1,921.72 2,300.32
B. COGS 1,143.32 1,199.90 1,477.84

C. Gross Profit 569.89 721.82 822.48

D. SG & A Expense
Total Employee Expense 161.70 200.78 236.22
Indirect Expense 197.84 314.87 316.30
E. EBITDA (incl OI) 210.35 206.17 269.96
Depreciation 25.57 34.37 53.92
F. EBIT 184.78 171.80 216.04
Finance Cost 58.16 62.46 48.32
Income of Exceptional Extraordinary items 0.77 3.12 5.31
G. EBT 127.39 112.46 173.03
Tax Expense
Income tax 46.57 48.36 51.48
Minimum alternative tax credit entitlement
Deferred tax charge / (credit) (7.71) (7.55) 12.93
Total Tax Expense 38.86 40.81 64.41
H. PAT 88.53 71.65 108.62
K Margins
Revenue Growth 12.52% 19.81%
COGS margin 66.74% 62.44% 64.24%
Employee expense margin 9.44% 10.45% 10.27%
Indirect expense margin 11.55% 16.38% 13.75%
EBITDA Margin 12.28% 10.73% 11.74%
EBIT Margin 10.79% 8.94% 9.39%
PAT Margin 5.17% 3.73% 4.72%
Tax Rate 36.56% 43.00% 29.75%
Deferred Tax Charge -16.56% -15.61% 25.12%
Interest Expense 31.48% 36.36% 22.37%
Statement

2015 A 2016A 2017E 2018E 2019E 2020E

2,348.34 2,795.57 3,338.65 3,980.85 4,750.38 5,666.40

- - - - - -
2,348.34 2,795.57 3,338.65 3,980.85 4,750.38 5,666.40
- - -
2,348.34 2,795.57 3,338.65 3,980.85 4,750.38 5,666.40
9.54 26.96 8.81 8.06 8.26 8.66
2,357.88 2,822.53 3,347.45 3,988.90 4,758.64 5,675.07
1,429.32 1,597.33 1740.67 1914.67 2093.80 2270.03

928.56 1,225.20 1,606.78 2,074.23 2,664.84 3,405.04

302.85 373.16 376.39 462.92 563.26 689.53

347.03 469.99 489.08 607.23 713.35 864.80
278.68 382.05 741.31 1,004.08 1,388.23 1,850.71
80.44 74.04 74.04 74.04 74.04 74.04
198.24 308.01 667.27 930.04 1,314.19 1,776.67
156.61 139.28 56.31 53.85 52.83 54.33
73.90 89.78 3.07 4.20 4.19 3.82
115.53 258.51 607.89 871.99 1,257.16 1,718.51

42.34 101.47 182.37 261.60 377.15 515.55

- - -
(3.66) (7.76) (22.09) (28.79) (37.16) (52.35)
38.68 93.71 160.27 232.81 339.99 463.20
76.85 164.80 447.61 639.18 917.17 1,255.31

2.38% 19.04% 19.43% 19.24% 19.33% 19.28%

60.62% 56.59% 52.00% 48.00% 44.00% 40.00%
12.84% 13.22% 11.24% 11.61% 11.84% 12.15%
14.72% 16.65% 14.61% 15.22% 14.99% 15.24%
11.82% 13.54% 22.15% 25.17% 29.17% 32.61%
8.41% 10.91% 19.93% 23.32% 27.62% 31.31%
3.26% 5.84% 13.37% 16.02% 19.27% 22.12%
36.65% 39.25% 30.00% 30.00% 30.00% 30.00%
-8.64% -7.65% -12.11% -11.00% -9.85% -10.16%
79.00% 45.22% 8.44% 5.79% 4.02% 3.06%
2021E

6,760.41
-
6,760.41
-
6,760.41
8.45
6,768.86
2436.79

4,332.07

813.03
1,038.53
2,480.51
74.04
2,406.47
53.67
4.07
2,348.72

704.62

(75.97)
628.65
1,720.08

19.31%
36.00%
12.01%
15.34%
36.65%
35.55%
25.41%
30.00%
-10.78%
2.23%
 Balance Sheet
(All data is Millions.)

Particulars

Equity and Liabilities

I Shareholders’ Funds 2 2012A 2013A 2014A 2015A 2016A
Share Capital ### 1.45 2.08 2.17 2.17 2.02
Reserves & Surplus ### 781.16 2,447.95 2,901.74 2,976.64 4,837.98
Total Equity ### 782.61 2,450.03 2,903.91 2,978.81 4,840.00
II Non - Current Liabilities 2012A 2013A 2014A 2015A 2016A
Long term borrowings 47.14 375.55 24.59 660.38 308.37
Deferred Tax Liability - - 0.53 - -
Other Long Term Liabilities - - - 0.20 2.56
Long-term provisions 2.54 3.68 5.11 8.87 7.68
Total Non - Current Liabilities 49.68 379.23 30.23 669.45 318.61

III Current Liabilities 2012A 2013A 2014A 2015A 2016A

Short-term borrowings 417.50 349.80 334.57 352.78 497.99
Trade Payables 745.96 711.69 894.26 1,104.09 1,072.19
Other Current Liabilities [V] 72.26 84.44 79.52 210.85 76.91
Short Term Provisions 8.87 12.86 0.33 - 49.19
Total Current Liabilities 1,244.59 1,158.79 1,308.68 1,667.72 1,696.28

Total Equity and Liabilities 2,076.88 3,988.05 4,242.82 5,315.98 6,854.89

Assets
I. Non - Current Assets 2012A 2013A 2014A 2015A 2016A
Fixed Assets [I]
Tangible Assets 106.33 125.85 190.19 190.25 140.38
Intangible Assets 53.79 49.81 43.27 77.36 115.91
Capital Work-in-Progress 15.71 - 23.40 0.02 0.11
Total Fixed Assets 175.83 175.66 256.86 267.63 256.40

Non-current investments 231.37 1,884.25 1,885.78 2,714.72 3,530.41

Long term Loans & Advances [II] 43.27 32.42 33.12 62.95 79.01
Other Non-Current Assets - 10.63 14.37 14.42 9.37
Deferred Tax assets(net) 4.85 12.41 - 3.13 10.89

Total Non - Current Assets 455.32 2,115.37 2,190.13 3,062.85 3,886.08

II Current Assets 2012A 2013A 2014A 2015A 2016A

Current Investments 4.47 3.11 1.29 42.36 162.32
Inventories [III] 418.23 450.83 501.47 485.13 596.25
Trade Receivables 706.32 973.51 1,370.35 1,482.58 1,913.81
Cash and Bank Balances [IV] 28.58 32.00 33.99 57.22 99.52
Short Term Loans and Advances 455.37 413.23 144.47 183.59 195.34
Other Current Assets 8.59 - 1.12 2.25 1.57
Total Current Assets 1,621.56 1,872.68 2,052.69 2,253.13 2,968.81

Total Assets 2,076.88 3,988.05 4,242.82 5,315.98 6,854.89

Payable Days 227.204 272.027 272.690 273.801

Inventory turnover days 137.14 123.85 123.89 136.25
Recievable days 184.90 217.44 229.50 247.49
 2017E 2018E 2019E 2020E 2021E
2.02 32.02 32.02 32.02 32.02
5,285.59 9,144.77 10,061.95 11,317.26 13,037.34
5,287.61 9,176.79 10,093.97 11,349.28 13,069.36
2017E 2018E 2019E 2020E 2021E
- - - - -
- - - - -
2.56 2.56 2.56 2.56 2.56
7.68 7.68 7.68 7.68 7.68
10.24 10.24 10.24 10.24 10.24

2017E 2018E 2019E 2020E 2021E

497.99 497.99 497.99 497.99 497.99
1,335.31 1,468.79 1,606.20 1,741.39 1,869.32
78.28 79.79 78.63 78.40 78.77
14.25 15.33 15.82 18.92 22.70
1,925.83 2,061.90 2,198.64 2,336.70 2,468.78

7,223.69 11,248.93 12,302.84 13,696.22 15,548.38

2017E 2018E 2019E 2020E 2021E

150.60 159.45 166.17 161.37 155.60

68.03 70.88 75.09 81.45 82.27
7.85 6.28 7.53 4.36 5.22
226.48 236.61 248.79 247.18 243.09

4,139.66 5,058.89 5,978.12 6,897.35 7,816.58

50.15 51.53 55.35 59.80 59.17
9.76 11.71 11.93 11.44 10.84
6.26 6.54 5.36 6.44 7.10

4,426.05 5,358.74 6,294.19 7,215.77 8,129.68

2017E 2018E 2019E 2020E 2021E

162.32 162.32 162.32 162.32 162.32
621.31 674.42 744.28 816.03 867.57
1,103.90 1,238.80 1,367.41 1,463.61 1,579.72
733.99 3,628.37 3,548.20 3,855.55 4,623.86
174.47 184.47 184.76 181.23 183.48
1.65 1.82 1.68 1.72 1.74
2,797.64 5,890.19 6,008.65 6,480.45 7,418.69

7,223.69 11,248.93 12,302.84 13,696.22 15,548.37

280 280 280 280 280

130.28 128.57 129.75 131.21 129.95
231.48 236.16 238.37 235.34 236.62
 Cash Flow Statements
(All data is in Millions .)

Particulars
A. Cash Flow from Operating Activities 2012A 2013A 2014A
Profit before Tax 127.39 112.46 173.03
Adjustments for
Depreciation 25.57 34.37 53.92
Loss/Profit on sale of investments (0.13) (0.45)
Loss/Profit on disposal of fixed assets 1.38 0.21 0.01
Employee Stock compensation expense -
Finance Cost 58.16 62.46 48.32
Interest Income (0.77) (3.12) (5.31)
Dividend Income (0.08) (0.10) (0.07)
Provision for bad debts 3.17 10.06 5.99
Written off 5.91 2.02 3.02
Operating Profit before Working Capital 220.60 218.36 278.46
Adjustments for
Change in Trade Payable 200.64 (21.77) 182.59
Change in Short Term Provisions (3.09) 1.20 1.58
Change in other current Liabilities (23.44) 11.78 7.45
Change in trade receivable (115.03) (277.25) (402.83)
Change in inventories (98.69) (32.61) (50.63)
Change in term Loans & Advances (112.21) 28.26 282.88
Change in Other Current assets - 8.59 (1.12)
Cash generated from Operating Activities 68.78 (63.44) 298.38
Direct Tax Paid (38.86) (40.81) (64.41)
Net Cash from Operating Activities 29.92 (104.25) 233.97

B. Cash Flow From Investing Activies 2012A 2013A 2014A

Net Proceed from sale of fixed assets - (0.17) 81.20
Purchase/Sale of Investments (103.51) (1,651.61) 0.27
Invesments in deposits with Banks - (4.36) (0.35)
Maturities of deposits with banks 6.11 - -
Interest Received 0.36 3.87 5.17
Dividend Received 0.08 0.10 0.07
Net Cash from Investing Activities (96.96) (1,652.17) 86.36

C. Cash Flow From Financing Activies 2013A 2014A

Proceeds from issue of equity share capital (428.84) 0.63 -
Securities premium received on issue of shares - 1,598.05 -
Share application money refunded - (12.51) -
Proceeds/Repayment of Long Term Borrowings (154.89) 259.09 (26.41)
Interest Paid (55.38) (58.14) (48.83)
Dividend paid including tax thereon (2.92) (2.91) (4.73)
Net cash provided by / (used in) financing activities (642.03) 1,784.21 (79.97)

Net (decrease) / increase in cash and cash equivalents (709.07) 27.79 240.36
Cash and cash equivalents at the beginning of the year, less o/d 33.29 23.20 32.00
Cash and cash equivalents at the end of the year (675.78) 50.99 272.36
nts

2015A 2016A 2017E 2018E 2019E 2020E 2021E

115.53 258.51 607.89 871.99 1,257.16 1,718.51 2,348.72

80.44 74.04 74.04 74.04 74.04 74.04 74.04

(16.42) - - - - -
(2.12) (2.17) - - - - -
- 5.12 - - - - -
156.61 139.28 56.31 53.85 52.83 54.33 53.67
(73.90) (89.78) (3.07) (4.20) (4.19) (3.82) (4.07)
(0.07) (0.03) (0.07) (0.07) (0.06) (0.06) (0.06)
7.18 15.45 9.54 10.72 11.90 10.72 11.12
1.10 0.10 0.10 0.10 0.10 0.10 0.10
284.77 384.10 744.74 1,006.43 1,391.78 1,853.83 2,483.52

210.02 (28.36) 263.12 133.48 137.41 135.19 127.93

3.43 (1.19) (34.94) 1.08 0.49 3.10 3.78
10.70 (3.30) 1.37 1.51 (1.16) (0.22) 0.37
(120.51) (446.68) 809.91 (134.89) (128.62) (96.19) (116.11)
16.34 (111.12) (25.06) (53.11) (69.85) (71.75) (51.54)
(57.01) (21.87) (88.12) (268.94) (293.39) (292.28) (320.10)
(1.13) 0.68 (0.08) (0.18) 0.14 (0.04) (0.02)
346.61 (227.74) 1,670.94 685.37 1,036.81 1,531.62 2,127.83
(38.68) (93.71) (160.27) (232.81) (339.99) (463.20) (628.65)
307.93 (321.45) 1,510.67 452.56 696.82 1,068.42 1,499.18

2015A 2016A 2017E 2018E 2019E 2020E 2021E

10.77 (11.23) (29.92) 10.13 12.19 (1.61) (4.09)
(870.01) (919.23) (919.23) (919.23) (919.23) (919.23) (919.23)
- (0.22) (0.99) (1.18) (0.55) (0.59) (0.70)
0.01 - - - - - -
73.40 89.62 118.20 155.88 183.37 214.63 246.77
0.07 0.03 0.07 0.07 0.06 0.06 0.06
(785.76) (841.03) (831.87) (754.33) (724.15) (706.74) (677.20)

2015A 2016A 2017E 2018E 2019E 2020E 2021E

- 0.29 - 30.00 - - -
- 1,690.97 (0.29) 3,220.00 - - -
- - - - - - -
774.99 (337.88) - - - - -
(151.19) (132.39) (56.31) (53.85) (52.83) (54.33) (53.67)
 - - - - - - -
623.80 1,220.99 (56.60) 3,196.15 (52.83) (54.33) (53.67)

145.97 58.51 622.20 2,894.37 (80.16) 307.35 768.31

32.75 53.28 111.79 733.99 3,628.37 3,548.20 3,855.55
178.72 111.79 733.99 3,628.37 3,548.20 3,855.55 4,623.86

`
 Sultan Chand
Average Beta 1.48 As found from Reuters

Risk free rate(as on Aug 31,2017) 6.48% GOI Bonds - 10 Years rate

Average return on market 10.26% CAGR returns for 10 years

Effective Tax Rate 30%
Cost of equity 12.07%

WACC 12.07%
 Sultan Chand
DCF Valuation
(All data is Millions INR, except per share information, A - Actual, E - Estimated)

Calculation of Free Cash Flow

2012 A 2013 A 2014 A 2015 A 2016 A 2017 E 2018 E 2019 E

Revenues 1,713 1,922 2,300 2,358 2,823 3,347 3,989 4,759

EBIT 185 172 216 198 308 667 930 1,314
EBIT Margin 10.8% 8.9% 9.4% 8.4% 10.9% 19.9% 23.3% 27.6%
EBIT(1 - tax rate) 129 120 151 139 216 467 651 920
Net Operating Profit After Tax 129 120 151 139 216 467 651 920
Depreciation & Amortisation 26 34 54 80 74 74 74 74
Working Capital Change 315 628 899 655 1,363 313 366 429
Operating Cash Flow -160 -474 -694 -436 -1,073 228 359 565
FCFF -160 -474 -694 -436 -1,073 228 359 565
Net Finance Income/(costs) -57 -59 -43 -83 -50 -53 -50 -49
New Debt / (Debt repayment) - - - - - - - -
FCFE -217 -533 -737 -519 -1,122 175 309 517
Terminal Value
Projection year - - 1 2 3
Discount Factor @ Ke 1.00 1.00 0.89 0.80 0.71
Present Value of FCFE -1,122 156 246 367
2020 E Terminal Year WACC 12.07%

5,675
1,777
31.3%
1,244
1,244
74
462
856
856 Tax Rate
-51 Current Market Price(as on Sep 1, 2017)
- Outstanding Shares (millions)
806 Market Capitalisation (Rs. Millions)
18,933 Long Term Liabilities
4 Less: Cash & Cash Equivalents
0.63 Enterprise Value (Rs. Millions)
511 12,000

Growth Assumptions
Long term Industry growth rate 7.50%
(30 yr avg. Indian economy growth rate)

CAPM Assumptions
RFR 6.48%
Beta 1.48
Rp 3.78%
Ke 12.07%

Equity Value 12,157

Number of shares 30
Fair Value per share 403
Current Share Price 482
Potential Upside -16.48%
 30%
482
35
16,677
308
100
16,886