Maruti 3QFY09 Result Update; Below expectation, maintain REDUCE rating; Target: Rs565

Maruti Suzuki India Ltd

 

Below expectation, maintain REDUCE rating

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REDUCE

 

CMP: Rs545                            Target Price: Rs565

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Maruti 3QFY09 numbers were below expectation. Though net sales at Rs 46.8 bn was ahead of our expectation, adjusted EBIDTA at Rs 3.9 bn and adjusted net profits at Rs 2.4 bn were below our expectation of Rs 4.6 bn and Rs 3.1 bn respectively.  This was on account of cost pressures being witnessed across the board. 

At Rs 545, the stock trades at PER of 9.8x and EV/EBIDTA of 4.3x our FY10 estimates. We have adjusted our earnings estimates downwards by 1% and 2% to Rs 49.4 and Rs 55.6 for FY09 and FY10 respectively.  We maintain our REDUCE rating on the stock with a target price of Rs 565.