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Check Before You Invest : Maruti Suzuki India Ltd

BSE: 532500 NSE: MARUTI ISIN: INE585B01010
  |   Sector:  Automobiles   |   Industry:  Automobiles - Passenger Cars

Snapshot

Q.1 Which industry/sub-sector does Maruti Suzuki India Ltd belong to?
Maruti Suzuki India Ltd belongs to the Automobiles sector, operating specifically within the Automobiles - Passenger Cars segment.
Q.2 Is Maruti Suzuki India Ltd a good quality company?
Maruti Suzuki India Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Maruti Suzuki India Ltd undervalued or overvalued?
Maruti Suzuki India Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 27.86 33.50
Price to Book 3.82 4.41
Price to Sales 2.27 2.73
EV to EBITDA 15.78 18.52
Q.4 Is Maruti Suzuki India Ltd a good buy now?
Maruti Suzuki India Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd revenue growth is 7.8% for FY-2025, which is below its 5-year CAGR of 15.11%, indicating slower growth.

Q.2 Gross Profit margin of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.7% for FY-2025, which is above its 5-year median of 12.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.23% for FY-2025, which is above its 5-year median of 11.09% indicating increasing margins.

Q.4 Net Profit Margin of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Net Profit Margin is 9.48% for FY-2025, is above its 5-year median of 6.98%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 15.7 12.3
Operating Profit Margin (%) 13.23 11.09
Net Profit Margin (%) 9.48 6.98

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Return on Asset is 11.73%, which is above its 5-year historical median of 9.46%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Return on capital employed is 21.78% for FY-2025, which is above its 5-year historical median of 16.26%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Return on equity is 15.95% for FY-2025, which is above its 5-year historical median of 12.72%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Cash conversion cycle is -24 days, in line with its 5-year historical median of -24 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.29 1.29
ROE (%) 15.95 12.72
ROCE (%) 21.78 16.26
Cash Conversion Cycle -24 days -24 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.04, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Maruti Suzuki India Ltd?
Maruti Suzuki India Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Maruti Suzuki India Ltd?

Q.1 Promoter shareholding and pledge status of Maruti Suzuki India Ltd?
Promoters hold 58.53% of the Maruti Suzuki India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Maruti Suzuki India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Maruti Suzuki India Ltd vs industry peers?
Maruti Suzuki India Ltd revenue CAGR is 15.11%, compared to the industry median CAGR of 13.05%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7.8 13.1
Gross Profit Growth (%) 11.4 20.5
Operating Profit Growth (%) 8.8 22.7
Net Profit Growth (%) 7.5 20.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.29 1.27
ROE (%) 15.95 14.44
ROCE (%) 21.78 17.4
Cash Conversion Cycle (days) -24.03 -24

Valuation & price assessment

Q.1 Stock return of Maruti Suzuki India Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 12.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
12.7% 13.8% 12.5% 4.7%
Q.2 Valuation ratios of Maruti Suzuki India Ltd vs historical?
The current P/E ratio of 27.86 is lower than its historical median of 33.50, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 27.86 33.50 29.57
Price to Book 3.82 4.41 4.34
Price to Sales 2.27 2.73 2.57
EV to EBITDA 15.78 18.52 17.11

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