Maruti Suzuki India (MSIL), India's leading passenger vehicle manufacturer Q4FY21 results was below our and consensus estimates at EBITDA and Adj. PAT level due to higher RM cost, higher other expenses and significantly lower other income. "We believe MSIL has been very conservative in terms of taking the price hike considering uncertain demand scenario in last 2 years," said IDBI Capital in its report.

The broking firm expects higher commodity prices; increase in operating expenses, adverse product mix (market share loss in UV segment) would impact operating profits in near term. "We build volume growth of 25%/10% for FY22E/FY23E respectively on account of lower base and expect FY23E volume to cross FY19 volumes however operating profits would continue to remain under pressure."

It further expects revenue/earnings to grow at ~7%/5% CAGR over FY20-FY23E with EBITDA margin of ~9.8%. "We have arrived FY23E EPS at Rs 226, factoring the volume growth and lower realisation. We change our rating to REDUCE (earlier ACCMULATE) and arrive at a TP of Rs 6,100 (earlier Rs 7,912) based on PER of 27x FY23E EPS."

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