MARUTI SUZUKI - RAYRC

MARUTI SUZUKI CMP: Rs.9,315.45 DATE:28.7.2018

HIGHLIGHTS:

The Indian auto industry

became the 4th largest in the

world with sales increasing 9.5

per cent year-on-year to 4.02

million units. It was the 7th

largest manufacturer of

commercial vehicles in 2017.

India is also a prominent auto

exporter and has strong

export growth expectations

for the near future. Overall

automobile exports from India

grew at 6.86 per cent CAGR

between FY13-18. Overall

domestic automobiles sales

increased at 7.01 per cent

CAGR between FY13-18 with

24.97 million vehicles getting

sold in FY18.

Maruti Suzuki India Ltd.

incorporated in the year 1981

and headquartered in New

Delhi, was a Large Cap

company (having a market cap

of Rs 281,401.17 Cr.) operating in Auto sector. Maruti Suzuki India Limited, formerly known

as Maruti Udyog Limited, is an automobile manufacturer in India. Maruti Suzuki grabbed

50% market share in the passenger vehicles segment for the first time ever in 2017-18.It

manufactures and sells popular cars such as the Ciaz, Ertiga, Alto, swift Dzire and Omni. This

company’s BSE/NSE code is 532500/MARUTI. The Company has recorded a healthy financial

performance in FY2017-18 with revenue growth of 5.63% which stood at Rs.840,869 million

in FY2017.18 as against Rs.796,060 million in FY2017-18 , Expenses Growth of 4.93% which

was at Rs. 730,833 million in FY2017-18 as compared to Rs.696,516 million in FY2016-17

and profit growth of 4.92%,Rs.78,807 million in FY2017-18 as compared to Rs. 75,110

million in FY2016-17 .Over the course of 5 years the company’s revenue increased at a CAGR

COMPANY DETAILS

Industry Type Automotive

Headquartered & Incorporated New Delhi,1981

Market Cap (In Cr.) Rs.2,81,401.17

52 wk High/Low 7377.75/10000.00

BSE/NSE Code 532500/MARUTI

KEY FINANCIALS(MN.)

Year Revenue Expenses Profit

2013-14 452,811 415,473 28,529

2014-15 516,664 466,904 38,074

2015-16 590,835 524,539 46,988

2016-17 796,060 696,516 75,110

2017-18 840,869 730,833 78,807

SHAREHOLDING PATTERN

23.66%

56.21%

6.49%

6.20%

3.84% 3.61%

Foreign Institutions

Foreign Promoter

Financial Institutions

Non-Banks Mutual Funds

Others

General Public

of 11.64% . Foreign Promoter held more shares in shareholding pattern which was 56.21%

of total shares. Afterward Foreign Institutions, Financial Institutions,Non Banks Mutual

Funds ,Others and General public having shares of 23.66%,6.49%,6.20%, 3.84%,3.61%

subsequently.

FINANCIAL PERFORMANCE:

FINANCIAL PERFORMANCE

PARTICULARS 2016-17 2017-18 BALANCE SHEET SIZE (In Mn.) 519,605 602,484

SHAREHOLDER'S FUND (In Mn.) 370,751 425,594

LIABILITIES (In Mn.) 148,700 176,729

ROA (%) 14.46 13.08

ROE (%) 20.26 18.52

ROCE (%) 19.40 17.59

NET PROFIT MARGIN (%) 9.44 9.37

EPS(Rs.) 248.64 260.88

The company has provided a healthy and strong financial performance In FY2017-18.

Balance sheet size of the company has increased to Rs.602,484 millions in FY2017-18 from

Rs.519,605 millions in FY2016-17Shareholder’s fund has increased by 14.79% in FY2017-18

,Rs.425,594 millions in FY2017-18as against Rs.370,751 millions in FY2016-17.Liabilities has

increased to Rs. 176,729 millions in FY2017-18 from Rs. 148,700 millions in FY2016-

17.Returns of the company has shown a decline in FY2017-18.ROA,ROE, ROCE stood at

13.08%, 18.52%, 17.59% respectively in FY2017-18 as comparable to 14.46%, 20.26%,

19.40% respectively in FY2016-17. Net Profit Margin has also decreased in FY2017-18 and

stood at 9.37%.EPS has increased to Rs.260.88 in FY2017-18 from Rs.248.64 in FY2016-17.

FINANCIAL ANALYSIS:

REVENUE VS. EXPENSES:

4,52,811 5,16,664 5,90,835 7,96,060 8,40,8694,15,473 4,66,904 5,24,539

6,96,516 7,30,833

2013-14 2014-15 2015-16 2016-17 2017-18

REVENUE Vs.EXPENSES

REVENUE(In Mn.) EXPENSES(In Mn.)

The above graph Shows the five years Revenue and expenses of Maruti Suzuki which has

increased Y-O-Y.In FY2017-18,Revenue of the company has registered a growth of 5.63%

whereas the expenses has registered a growth of 4.93%.

REVENUE:

Revenue of the company has increased to Rs. 840,869 Millions in FY2017-18 as compared to

Rs.796, 060 millions in FY2016-17, recording a growth of 5.63%.This Growth was mainly on

account of increase in sale of Vehicles of 5.03%, sale of Spare parts of 10.51%, Income from

services of 23.23%, Sale of scrap of 30.14%, Recovery of service charges of 21.03%, Rental

Income of 17.02%.Interest Income of 80.42%, Dividend from equity investments of 55.03%,

Net gain on sale of investments in debt mutual funds of 57.00%.

EXPENSES:

Expenses of the company has Increased by 4.93%, Rs.730,833 Millions in FY2017-18 as

compared to Rs. 696,516 millions in FY2016-17.This increase was due to increase in Cost of

Material Consumed of 5.43%, Employee Benefits Expenses of 21.32%, Finance Costs of

286.80%, Depreciation and Amortisation of 5.99%, Other Expenses of 14.52%.

Employee benefit expenses has increased by 21.32% due to increase in Salaries and

wages of 19.74%, Contribution to provident and other funds of 39.01%, Staff welfare

expenses of 31.23%.

Finance cost has increased to Rs.3,458 millions in FY2017-18 from Rs.894 millions in

FY2016-17.This increase was due to increase in Deposits from dealers, contractors and

others of 45.16%, Interest on enhanced compensation for land of Rs.2,548 Millions.

Depreciation and amortization cost has increased by 5.99% due to increase in

Depreciation of property, plant and equipment of 5.50%, Amortisation of intangible

assets of 18.83%.

Other Expenses of the company has surged by 14.52% because of Increase in

Consumption of stores of 5.39%, Power and fuel of 29.84%, Repair and maintenance of

plant and machinery of 29.86%, Repair and maintenance of building of 26.06%,

Insurance of 8.60%, Advertisement of 4.34%, Sales promotion of 52.12%, Warranty and

product recall of 80.93%, Transportation and distribution expenses of 48.28%, Corporate

social responsibility expenses of 39.73%.

NET PROFIT:

Profit of the company has increased Y-O-Y.During FY2017-18, Profit of the company has

increased to Rs.78, 807Millions from Rs.75,110 Millions in FY2016-17,recording a growth of

4.92% .This Increase was due to increase in Revenue of 5.63%

NET PROFIT MARGIN:

Net Profit Margin of the company has declined to 9.37% in FY 2017-18 as compared to

9.44% in FY2016-17.As operating Expenses has Increased, Profit Margin has declined.

28,529

38,074

46,988

75,11078,807

2013-14 2014-15 2015-16 2016-17 2017-18

NET PROFIT(In Mn.)

6.30

7.377.95

9.44 9.37

2013-14 2014-15 2015-16 2016-17 2017-18

PROFIT MARGIN(%)

EQUITIES & LIABILITIES:

Equity and Liabilities of the company has increased by 15.95%,Rs.602,484 Millions in

FY2017-18 as against Rs. 519,605 Millions in FY 2016-17.This Increase was due to increase

in Reserve & Surplus of 14.85%,Deffered tax Liabilities of 19.02%, Other long term liabilities

of 43.46%,Longterm Provisions of 21.00%,Long term provisions of 21.00%,Trade Payables of

25.45%,Other Current Liabilities of 2.38%,Short Term Provisions of 89.88%,Current tax

liabilities of 6.28%.

ASSETS:

Assets of company has increased to Rs.602,484 millions in FY2017-18 from Rs.519,605

Millions in FY2016-17,recording a growth of 15.95%.This growth was due to Increase in

Tangible Assets of 1.08%,Non-current investments of 29.42%,Other financial assets of

3,14,1143,44,786

4,02,699

5,19,605

6,02,484

2013-14 2014-15 2015-16 2016-17 2017-18

EQUITY & LIABILITIES(In Mn.)

3,14,1143,44,786

4,02,699

5,19,605

6,02,484

2013-14 2014-15 2015-16 2016-17 2017-18

ASSETS(In Mn.)

36.10%, Other Non-current Assets of 15.93%, Trade Receivables of 21.85%, Short Term

Loans and Advances of 20.00%.

RETURNS:

Returns of the company has slightly declined in FY2017-18 .ROA of the company stood at

13.08% in FY2017-18 as compared to 14.46% in FY2016-17.ROA of the company has

declined as the company has purchased much Assets as compared to its Profit.ROE stood at

18.52% in FY2017-18 as compared to 20.26% in FY2016-17.ROCE has declined to 17.59% in

FY2017-18 from 19.40% in 19.40% in FY2016-17.

NET CASH FLOW:

There was a positive cash flow in FY2017-18 which stood at Rs.501 millions in FY2017-18 as

against (Rs.205) millions in FY2016-17.This Positive cash flow was due to Unrealised foreign

exchange gain, Net gain on sale of fixed Assets, Proceeds from sale of property, plant and

9.08 11.04 11.67 14.46 13.08

13.2715.66 16.93

20.26 18.5212.31

14.9316.31

19.4017.59

2013-14 2014-15 2015-16 2016-17 2017-18

RETURNS

ROA(%) ROE(%) ROCE(%)

-762

-454

268

-205

501

2013-14 2014-15 2015-16 2016-17 2017-18

NET CASH FLOW(In Mn.)

equipment, Proceeds from sale of debt mutual funds, Interest Received, Dividend Received,

Proceeds from Short Term borrowings, Proceeds from Long Term borrowings.

CONCLUSION:

In FY 2017-18,the company has posted a healthy growth in Revenue and profit. Probably the results should be seen in a context that while the market growth was slow in past years, the Company continued to strengthen its foundation for long-term sustainability. It introduced a new sales channel, NEXA, and offered exciting products. The Company also started up gradation of the overall sales experience in the existing channel in line with NEXA. The Company’s entry in the compact SUV segment was well received by customers, helping it become the segment leader.

FINANCIAL STATEMENT:

CONSOLIDATED PROFIT & LOSS STATEMENT:

CONSOLIDATED PROFIT & LOSS STATEMENT

(In Millions)

Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 Revenue from Operations

Gross Sale of Products 485,305 545,459 646,759 773,164 820,411

Less: Excise Duty 52,587 52,509 76,144 - -

Net Sale of Products 432,718 492,950 570,615 773,164 820,411

Other Operating Revenue 11,788 15,064 15,505 -

445,418 508,014 586,120 773,164

Other Income 8,305 8,650 4,715 22,896 20,458

Total Revenue 452,811 516,664 590,835 796,060 840,869

Expenses

Cost of Material Consumed 293,452 333,612 362,007 426,279 449,432

Purchase of Stock-in-Trade 24,874 27,144 31,715 44,936 100,021

Change in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade

204 -4,609 63 -3,793 408

Excise duty 92,314 22,317

Employee Benefits 14,237 16,710 20,602 23,603 28,634

Finance Costs 1,845 2,178 937 894 3,458

Depreciation and Amortisation 21,160 25,153 28,670 26,039 27,598

Other Expenses 60,044 67,407 81,147 87,280 99,956

Vehicles / Dies for Own Use -343 -691 -602 -1,036 -991

Total Expenses 415,473 466,904 524,539 696,516 730,833

Share of profit of associates 1,493 1,366

Share of profit of joint ventures 235 267

Profit before Tax 37,338 49,760 66,296 101,272 111,669

Less : Tax Expense - Current Tax 7,740 13,363 20,788 23,369 33,505

MAT Credit availed of -704 -

Deferred Tax 1,282 -805 -801 2,793 -643

Profit for the Year 28,316 37,906 46,309 75,110 78,807

Minority Interest -16 -12 -10 - -

Share of Profit in respect of 229 180 689 - -

Investment in Associates

Profit for the Year 28,529 38,074 46,988 75,110 78,807

Other Comprehensive Income

A (i) Items that will not be reclassified to profit or loss

(a) gain / (loss) of defined benefit obligation

-159 -197

(b) gain / (loss) on change in fair value of equity instruments

2,361 3,470

2,202 3,273

A (ii) Income tax relating to items that will not be reclassified to profit or loss

61 39

B (i) Items that will be reclassified to profit or loss

-197

(a) effective portion of gain / (loss) on hedging instruments in a cash flow hedge

-72 -2

-72 -2

B (ii) Income tax relating to items that will be reclassified to profit or loss

25 1

Total Other Comprehensive Income (A (i+ii)+B(i+ii))

2,216 3,311

Total Comprehensive Income for the period (IX + X)

77,326 82,118

Profit for the year attributed to:

Owners of the Company 75,099 78,800

Non controlling interest 11 7

75,110 78,807

Other comprehensive income for the year attributable to:


Non controlling interest -1 -

2,216 3,311

Total comprehensive income for the year attributable to:


Non controlling interest 10 7

77,326 82,118

Earnings Per Share 94.44 126.04 155.55 248.64 260.88

CONSOLIDATED BALANCESHEET:

CONSOLIDATED BALANCE SHEET

(In Millions)

Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 Equity and Liabilities

Shareholders’ Funds

Share Capital 1,510 1,510 1,510 1,510 1,510

Reserves and Surplus 213,454 241,674 275,977 369,241 424,084

214,964 243,184 277,487 370,751 425,594

Minority interest 122 134 144 154 161

Non-current Liabilities

Long Term Borrowings 6,274 2,783 1,471 - 100

Deferred Tax Liabilities 5,962 4,844 4,751 5,058 6,020

Other long term liabilities 2,476 1,059 1,224 11,055 15,859

Long term provisions 2,007 2,958 3,021 219 265

16,719 11,644 10,467 16,332 22,244

Current Liabilities

Short term Borrowings 12,379 525 907 4,836 1,108

Trade Payables 49,998 56,568 71,271 83,692 104,993

Total outstanding dues of micro enterprises and small enterprise

- - 533 832 711

Total outstanding dues of creditors other than micro enterprises and small enterprises

- - 70,738 82,860 104,282

Other Current Liabilities 13,205 19,166 24,078 13,028 13,338

Short Term Provisions 6,727 13,565 18,345 4,498 8,541

Current tax liabilities (Net) 8,036 8,541

Other current liabilities 18,278 20,896

82,309 89,807 114,601 132,368 154,485

Total liabilities 99,028 101,451 125,068 148,700 176,729

Total 314,114 344,769 402,699 519,605 602,484

Assets

Non-Current assets

Fixed Assets

Tangible Assets 108,493 121,947 126,251 129,377 130,771

Intangible Assets 1,844 2,948 3,508 12,523 3,117

Capital Work in progress 26,395 18,901 10,134 3,730 21,321

136,732 143,796 139,893

Non-current investments 15,212 99,918 175,117 269,718 349,058

Long term loans and advances

16,539 13,666 13,555 3 2

Other financial assets 241 328

Other Non-current Assets 95 442 91 16,033 18,587

168,578 257,822 328,656 431,625 523,184

Current Assets

Current Investments 90,059 33,059 8,748 21,788 12,173

Inventories 17,632 26,744 31,998 32,637 31,602

Trade Receivables 14,891 11,443 13,873 12,026 14,654

Cash and Bank Balances 6,486 432 768 235 740

Other financial assets 951 2,846

Short Term Loans and Advances

12,832 12,017 15,957 25 30

Current tax assets (Net) 4,910 4,115

Other Current Assets 3,636 3,269 2,699 15,408 13,140

145,536 86,964 74,043 87,980 79,300

Total 314,114 344,786 402,699 519,605 602,484

CONSOLIDATED CASHFLOW:

CONSOLIDATED CASHFLOW STATEMENT

(Rs. In Millions)

2013-14 2014-15 2015-16 2016-17 2017-18 A. Cash flow from Operating Activities:

Net Profit before Tax 37,338 49,760 66,296 101,272 111,669

Adjustments for:

Share of profit of associates -1493.00 -1,366

Share of profit of joint ventures -235.00 -267

Depreciation and amortisation 21,160 25,153 28,670 26,039 27,598

Finance cost 1,845 2,178 937 894 3,458

Interest Expense

Interest Income -2,270 -1,089 -1,518 -378 -682

Dividend Income -545 -541 -107 -129 -200

Share of Profit in respect of Investment in Associates

229 180 689

Share of minority interest -16 -12 -10

Net Loss on Sale / Discarding of Fixed Assets

149 483 1,354 632 545

Net gain on sale of investments in associates

-99.00 -

Net gain on sale of investments in debt mutual funds

-614.00 -964

Fair valuation gain on investment in debt mutual funds

-21403.00 -18,612

Liabilities no longer required written back

-35.00 -852

Profit on Sale of Investments (Net) -4,555 -6,867 -3,039 -

Provisions no Longer Required Written Back

-912 -1,452 -2,184 -

Unrealised Foreign Exchange (Gain)/ Loss

-1,315 -3 -190 -320.00 34

Operating Profit before Working Capital changes

51,109 67,790 90,898 104,131 120,361

Adjustments for changes in Working Capital :

(Increase)/decrease in loans (non-current)

1.00 1

(Increase)/decrease in other financial assets (non-current)

-7 -87

Increase)/decrease in other non-current assets

-320 -24

Increase)/decrease in other current assets

1,044 2,071

(Increase)/decrease in inventories -1,311 1,035

Increase/(decrease) in other non-current liabilities

2,980 4,804

Increase/(Decrease) in Trade Payables 7,226 8,031 18,320 9,788 21,280

Increase/(Decrease) in Short Term Provisions

241 178 540 504 1,111

Increase/(Decrease) in Long Term Provisions

-252 951 63 71 46

Increase/(Decrease) in Other Current Liabilities

1,539 4,243 4,945 6,628 3,514

Increase/(Decrease) in Other Long Term Liabilities

18 -80 165

(Increase)/Decrease in Trade Receivables

464 3,448 -2,430 1,215 -2,619

Increase)/decrease in other financial assets (current)

639 -1,787

(Increase)/Decrease in Inventories 1,240 -9,112 -4,545

(Increase)/Decrease in short Term Loans and Advances

-1,489 822 -3,940 6 -5

(Increase)/Decrease in Long Term Loans and Advances

-4,137 -593 1,407

(Increase)/Decrease in Other Current Assets

2,270 370 -455 1,044

(Increase)/Decrease in Other Non Current Assets

299 94 351

Increase/(decrease) in non-current provisions

71

Increase/(decrease) in other financial liabilities (current)

-1,262

Cash generated from Operating Activities

58,528 76,142 105,319 126,049 148,439

Taxes (Paid) (Net of Tax Deducted at Source)

-8,582 -10,751 -19,475 -23,229 -30,560

Net Cash from Operating Activities 49,946 65,391 85,844 102,820 117,879

B. Cas h flow from Investing Activities:

Purchase of Fixed Assets -35,449 -32,792 -26,239 -32,524 -39,116

Payments for purchase of intangible assets

-1,388 -

Proceeds from sale of property, plant and equipment

164 264

Proceeds from sale of investment in associate company

219 -

Sale of Fixed Assets 89 161 192

Sale of Investments 104,498 152,699 74,045

Purchase of Investments -131,000 -173,538 -121,894

Proceeds from sale of debt mutual funds

118,393 425,643

Payments for purchase of debt mutual funds

-177,155 -470,689

Investments in Deposits with Banks -9,000 -

Deposits with banks not considered as cash and cash equivalents (placed) / matured

68

Maturities of Deposits with Banks 18,400 5,600 -68

Interest Received 1,948 1,519 669 382 681

Dividend Received 545 541 107 129 200

Net Cash from Investing Activities -49,969 -45,810 -73,188 -91,732 -83,017

C. Cas h flow from Financing Activities:

Proceeds from Short Term borrowings 12,379 525 907 4,836 1,108

Repayment of Short Term borrowings -8,639 -12,379 -525 -774 -4,836

Proceeds from Long Term borrowings 265 390 284 100

Repayment of Long Term borrowings -215 -2,114 -2,921 -1,535 -

Interest Paid -1,701 -2,216 -1,043 -3,465

Dividend Paid -2,417 -3,625 -7,552 -22,656

Finance cost paid -1,095 -

Corporate Deividend Tax Paid -411 -616 -1,538 -10,573 -

Related income tax -2,152 -4,612

Net Cash from Financing Activities -739 -20,035 -12,388 -11,293 -34,361

Net Increase/(Decrease) in Cash & Cash Equivalents

-762 -454 268 -205 501

Cash and Cash Equivalents as at 1st April (Opening Balance)

1,648 886 432 432 227

Cash and Cash Equivalents as at 31st March (Closing Balance)

886 432 700 227 728

Cash and Cash Equivalents comprise 886 432 700

Cash & Cheques in Hand 552 13 25 8 39

Balance with Banks 329 353 675 219 689

Balance with Scheduled Banks in Deposit Accounts

5 66 - 227 728

REFERENCE:

https://www.ibef.org/industry/india-automobiles.aspx

https://en.wikipedia.org/wiki/Maruti_Suzuki

https://www.bseindia.com/stock-share-price/maruti-suzuki-india-ltd/maruti/532500/

https://www.marutisuzuki.com/corporate/investors/company-reports

Documents

MARUTI SUZUKI - RAYRC