Maruti Suzuki India (MARUTI) Q4 18/19 earnings summary

Executive summary

• FY19 vehicle sales rose 4.7% to 1,862,449 units; domestic passenger-vehicle sales grew 5.3%, ahead of the industry’s 2.7% growth.

• Total revenue increased 8.3% to ₹885,813 million, while PAT declined 2.9% to ₹75,006 million as demand softened and costs pressured margins.

Financial highlights

• Total revenue was ₹885,813 million vs ₹818,082 million; net sales were ₹830,265 million vs ₹781,048 million.

• PBT fell 4.9% to ₹104,656 million; PAT fell 2.9% to ₹75,006 million; EPS was ₹248.30 vs ₹255.62.

• Domestic sales rose 6.1% to 1,753,700 vehicles; exports declined 13.7% to 108,749; total volumes increased 4.7%.

• Other income included ₹22,681 million of fair-value gains on debt mutual funds, vs ₹18,612 million in FY18.

• Operating cash flow fell 44.1% to ₹65,932 million; free cash flow fell 76.1% to ₹18,932 million.

Outlook and guidance

• FY20 outlook was uncertain: BS-VI, safety and other regulatory changes could raise vehicle prices and weigh on demand, especially for entry-level models.

• FY20 production and sales planning must account for the April 1, 2020 BS-VI registration deadline; unsold BS-IV vehicles cannot be sold after that date.

• Gujarat’s third production line was planned for commissioning in 2020; output was to be aligned with market demand.

• Factory-fitted CNG output was targeted to rise nearly 50% in FY20; an electric vehicle launch in India was announced for 2020.

• The chairman expected demand to recover and FY21 growth to return to its usual rate; this was an expectation, not formal numerical guidance.