Fundamental Analysis of Maruti Suzuki #StockScoreCard

Introduction

Maruti Suzuki is the manufacturer of the most popular cars in India. It is a subsidiary with ownership of 56% by its parent Suzuki Motor Corporation (A Japanese firm). Maruti Suzuki has given some of the best selling cars in the past including Maruti 800, Omni, Alto, Swift, Swift Desire, Ciaz and Baleno.



Fundamental Analysis of Maruti Suzuki #StockScoreCard



Fundamental Analysis

1. Growth Story

Maruti Suzuki is a true  market leader with a lion's share of 50% (source) in Indian Passenger Vehicle (PV) segment. This simply means that one in two cars sold in India is made by Maruti Suzuki! 

In the last five years, the company has doubled its revenue and profits which is an incredible performance. 

Recently, Suzuki also announced a partnership with Toyota on various aspects to improvise the capacity utilization, improving sales and global expansion (Africa).

Maruti Suzuki is definetly posied for growth looking at the long term.


    2. Shareholding Pattern

    Promoter (Suzuki Motor Corporation) holds 56.21% of the company shares which is a very good sign.

    3. Debts

    Maruti Suzuki has one of the best debt-to-equity ratio of 0.01

      4. Return on Equity

      Return on equity is also fantastic: 20.25 (as on March 2017)

      You can check out more info here: link 

        5. Valuations

        • Current Stock Price: 8945
        • Earnings (last 4 quarters): 62.30 + 59.56 + 82.24 + 51.52 = 225.62
        • PE Ratio: 8945/225.62 = 39.6


        Summary

        Although valuations look bit expensive, given the quality management with proven track record and very strong moat, I personally think Maruti Suzuki is a great investment at current market price (INR 8945) for long term investment.






        FYI, #StockScoreCard is an special blog series where we will try to share the fundamental analysis of an individual stock based on the five multibagger magic mantras (link)

        Check out all #StockScoreCards here: link

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