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(* 10 YEAR X-RAY shows the financial performance of a company in the last 10 years.) <\/strong><\/p>\n Maruti Suzuki India Ltd, a subsidiary of Suzuki Motor Corporation of Japan, is India\u2019s largest passenger car company<\/strong>, with over 50% market share. Almost all its models are in the A2 passenger car segment.<\/strong> Suzuki’s technical superiority lies in its compact & light-weight engines, which are clean and fuel efficient<\/p>\n Maruti Suzuki has two state-of-the-art manufacturing facilities, one at Gurgaon and the other at Manesar, with a total installed capacity of 10,00,000 cars per year<\/strong>. It has a strong sales network of 600 outlets and service network of 2628 workshops.<\/strong> It exports its cars to over 100 countries<\/strong>. Exports accounted for over 17% of the company’s sales in FY10<\/p>\n Stock Shastra #3 talks about the 5 Financial Parameters(Net Sales Growth Rate, EPS Growth Rate, BVPS Growth Rate, ROIC & Debt\/Net Profit Ratio) by which we can shortlist wonderful companies with an Excellent Financial Track Record. In case of Maruti, the growth in Net Sales has been consistently good, because of increasing demand over the years. Its EPS and BVPS growth rates have been impressive too. \u00a0Maruti\u2019s management has been utilizing its funds in an optimum manner, as indicated by its average ROIC of 25.5%. The company has a comfortable debt position too. Looking at all these parameters, we can say that Maruti Suzuki is a company worth short-listing, on the basis of its financial track record <\/strong><\/p>\n The 10 YEAR X-RAY of Maruti Suzuki is Green (Very Good)<\/strong><\/span><\/p>\n Increasing competition, interest rates, fuel prices and withdrawal of European incentive scheme will affect its demand in the short term. Besides, increasing raw material prices, excise duty hike from 8% to 10% are other concerns. Despite these concerns, higher employment rate and increased salaries will drive the sale of A2 segment cars in India.<\/strong> Maruti, being the leader in this segment will benefit the most from this increase<\/p>\n Hence, we can expect the short-term outlook <\/strong>of Maruti Suzuki to be Orange (\u2018Somewhat Good\u2019)<\/strong><\/span><\/p>\n Increasing Competition in the small car segment <\/strong>poses a threat: \u00a0\u00a0Tata Motors has taken over the tag of \u2018entry-level-car-maker\u2019 with the launch of Nano. With other companies like Toyota, Volkswagen, Ford etc planning to launch cars in the A2 segment, competition is set to heat up; putting pressure on Maruti\u2019s market share<\/p>\n In this context: Will Maruti remain a winner in the future? <\/em><\/strong><\/p>\n Maruti has been the market leader for over 2 decades now. Before the Government allowed foreign car makers in India, Maruti was competing with local players like Telco, Hindustan Motors etc. Once foreign players started entry in 90s, Maruti initiated strategic responses to its new competition & fought hard to maintain its position. It narrowed down on a plan and changed its focus from only production to \u2018marketing & customer focus\u2019 Under this phase, Maruti launched a new model every year, it increased its sales & service network to reach customers and improved its technology.<\/strong> As a part of the plan, it completed a Rs. 400 Cr. expansion project which increased the total production capacity to over 3,70,000 vehicles p.a. It thus, won the battle then, maintaining its leadership position<\/strong><\/p>\n This redesign phase helped Maruti develop a few moats (sustainable competitive advantage):<\/p>\n These moats have remained its key growth drivers till date and in the future. <\/strong><\/p>\n The Company is now taking steps to fight the current competition it is facing:<\/em><\/strong><\/p>\n Volkswagen, the largest car-maker in Europe with 57% market share, has purchased a 19.9% stake in Suzuki Motors. Does this have any significance for Maruti?<\/strong> In the long term, we expect Maruti Suzuki to gain from this, as Suzuki will benefit from the diesel-engine technology strengths of Volkswagen. Also, Europe is a major export destination for Maruti Suzuki. It will also help the Company access better technology in the future, which will strengthen its position globally. This deal will also help Maruti compete better in India and in exports<\/p>\n Yes, competition is getting aggressive. But Maruti Suzuki is \u00a0taking appropriate steps to fight\u00a0 competition and remain a winner <\/strong><\/p>\n Considering all the above factors, we can expect the long-term outlook <\/strong>of Maruti Suzuki to be Green (Very Good).<\/strong> <\/span>It is likely to overcome its roadblocks and remain \u00a0successful. However, it will not be a smooth ride for the company, along the way<\/strong><\/p>\n Conclusion: <\/strong><\/p>\n Maruti has proved itself in the past by sustaining its market leadership position. It is well-poised for growth in the long term due to its growing business, the competitive advantage of its market share especially in the A2 segment, its wide sales & service network and superior technology. Competition is \u00a0likely to give it a bumpy ride, but it is well-armed to remain successful<\/p>\n If you liked what you read and would like to put it in to practice Register at MoneyWorks4me.com<\/a>. You will get amazing FREE features that will enable you to invest in Stocks and Mutual Funds the right way. Need help on Investing? And more<\/b>\u2026.<\/b>Puchho<\/b> Befikar<\/b><\/span><\/p>\n Kyunki<\/i><\/b> yeh<\/i><\/b> paise<\/i><\/b> ka<\/i><\/b> mamala<\/i><\/b> hai Maruti Suzuki India Ltd. \u2013 Will it win the Battle, again? Maruti Suzuki\u2019s 10 YEAR X-RAY*: Green (Very Good) (* 10 YEAR X-RAY shows the financial performance of a company in the last 10 years.) Maruti Suzuki, in brief Maruti Suzuki India Ltd, a subsidiary of Suzuki Motor Corporation of Japan, is India\u2019s largest passenger […]<\/p>\n","protected":false},"author":15,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"_links":{"self":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/pages\/1192"}],"collection":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/comments?post=1192"}],"version-history":[{"count":0,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/pages\/1192\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media?parent=1192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Maruti Suzuki, in brief<\/h2>\n
What does Maruti Suzuki\u2019s past say?<\/strong><\/h2>\n
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<\/strong><\/p>\nWhat is Maruti Suzuki\u2019s Short-term Outlook?<\/strong><\/h2>\n
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What is Maruti Suzuki\u2019s Long-term Outlook?<\/h2>\n
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