Maruti Suzuki India (MARUTI) Q4 05/06 earnings summary

Executive summary

• FY05-06 net sales rose 10% YoY to Rs. 120,034 million; PAT increased 39.3% to Rs. 11,891 million and passenger-car market share reached 55.1%.

• Record domestic and export vehicle sales totaled 561,819 units; Swift launch, market expansion and operating efficiencies supported growth as industry momentum slowed.

Financial highlights

• Gross sales were Rs. 147,043 million, excise duty Rs. 27,009 million and net sales Rs. 120,034 million, versus Rs. 132,914 million, Rs. 23,806 million and Rs. 109,108 million in FY04-05.

• EBITDA was Rs. 20,558 million versus Rs. 18,140 million; PBT rose to Rs. 17,500 million from Rs. 13,049 million, and PAT to Rs. 11,891 million from Rs. 8,536 million.

• Operating PBIT increased 41.3% to Rs. 13,412 million; net profit margin rose to 9.9% from 7.8%.

• Reported net sales and PBT included a Rs. 349 million dealer payment for unsold vehicles following the small-car excise reduction, reducing both by that amount in FY05-06.

Outlook and guidance

• Five new models are planned over five years; a new export-focused model is targeted for 2008, primarily for Europe and also for domestic sale.

• Manesar car and diesel-engine facilities were expected to start operations during FY06-07; car capacity planned initially at 100,000 units annually, scalable to 250,000.

• An in-house diesel car launch was planned for the second half of FY06-07 to enter a segment comprising nearly 20% of the car market.

• Outlook cited first-time buyers and low car penetration as growth opportunities, while noting higher interest rates and state road-tax increases had diluted the excise-cut benefit.