Key highlights from Maruti Suzuki India Limited (MARUTI) Q4 FY23 Earnings Concall
- [00:02:00] MARUTI said the company recorded its highest ever annual sales volume, with the annual turnover surpassing INR1 lakh crores.
- [00:03:04] MARUTI increased its market share in the SUV segment with the launch of Brezza and Grand Vitara and plans to further strengthen its SUV portfolio with Jimny and Fronx.
- [00:10:02] Kapil Singh from Nomura asked about the volume outlook for next year from demand and supply side, particularly from supply bottleneck point of view. Nikhil Vyas GM said that for the next FY23 FY24, the industry body estimates passenger vehicle industry growth of 5-7%. MARUTI expects to grow well beyond this and better than the industry.
- [00:11:08] Kapil Singh of Nomura enquired if the supply bottlenecks are specific to some powertrains or vendors for MARUTI or is it an industry-wide issue and how it will be addressed in the next year. Nikhil Vyas GM replied that MARUTI is facing a global problem of production loss due to supply side bottlenecks of semiconductors. Despite organizing supplies through multiple sources and minimizing consumption by removing unnecessary semiconductors from certain variants, MARUTI remains vulnerable to supply side bottlenecks.
- [00:12:41] Kapil Singh with Nomura also queried what were the factors behind the increase in raw material sales in 4Q23, how will it impact costs and margins for the quarter, and what is the outlook for next year. Ajay Seth CFO said discounts during 4Q23 were INR13,269 per vehicle, lower than Q3 but higher than 4Q22. The raw material to net sales ratio was affected by factors such as sales from SMG and Toyota and fixed costs classified as material costs. RM prices remained constant and discounts decreased vs. 3Q. FX rates were stable with some impact from yen deterioration. These factors resulted in the ratio reflected in the accounts.
- [00:14:59] Pramod Kumar from UBS asked about the jump in average consumption of semiconductors due to changes in models, feature enhancements, and transmission. Nikhil Vyas GM said the semiconductor content in cars has increased due to higher functionality and premium features. This is a global phenomenon affecting all manufacturers, leading to semiconductor shortages and pending bookings.
- [00:17:16] Pramod Kumar from UBS asked what is needed from a macro perspective to revive demand for the entry-level car segment, and where the demand for this category could settle considering its ongoing shrinkage. Nikhil Vyas GM replied that entry-level car sales in FY22-’23 were higher than the previous year with good growth. Next year, sales are expected to be similar to this year with flattish growth.
- [00:18:01] Pramod Kumar from UBS queried about the current order book numbers. Nikhil Vyas GM clarified that the total order book as of today morning would be 412,000. CNG is about one-third of that. And the new SUVs launched are also at a good number.
- [00:19:29] Gunjan Prithyani with Bank of America enquired about any clarity on the semiconductor supply normalizing. Nikhil Vyas GM answered that MARUTI does not have full year visibility, but 1Q will be tougher than other quarters and the uncertainty continues.
- [00:22:38] Gunjan Prithyani with Bank of America queried how is the company positioning itself for the shift towards EVs in the fleet segment, particularly in the small car/entry car segment. Nikhil Vyas GM said MARUTI has the least CO2 emissions among all car manufacturers in India. The company will launch an EV next FY with powerful specs, including a 550 km range and a 60 kWh battery size.
- [00:24:32] Raghunandhan N.L. from Nuvama enquired about MARUTI’s thoughts on the commodity basket going forward as the precious metals form more than 5% of the RM cost and have fallen 10-30%. Nikhil Vyas GM replied commodity prices are mixed. Some precious metals have corrected with a lag effect. Steel remains the biggest commodity and prices are expected to increase due to rising demand.
- [00:26:17] Raghunandhan N.L. with Nuvama asked how has the customer mix for rural vs. urban, first-time, additional and replacement buyers changed in FY23 and which segments are doing well. Nikhil Vyas GM answered that the first time buyers is about at 42%, consistent with the past; replacement buyer at 21%, up 2%. Additional car in the family is 37%. And rural continues to be strong.
- [00:27:24] Raghunandhan N.L. from Nuvama asked which customer category is expected to do better going forward. Nikhil Vyas GM said there is a shift towards premium cars and SUVs, which now make up 43% of the market and may increase further. MARUTI has launched exciting products in this segment.
- [00:29:14] Amyn Pirani from JPMorgan asked regarding the capacity announcement and capex number, will the 1 million capacity be coming in the same place as the 250,000 in Haryana and the timeline for it. Nikhil Vyas GM answered the first plant in the Kharkhoda site in District Sonipat has a capacity of 250,000 and room for 4 such plants. The board has approved an additional 1 million in principle, but more groundwork needs to be done.
- [00:31:15] Amyn Pirani from JPMorgan asked about the INR8,000 crore capex number for next year and its spend. Ajay Seth CFO replied that the capex number for next year is INR 8,000 crores and will include core investment, new models and projects, and regular maintenance. The majority of this is towards the new Kharkhoda plant.
- [00:34:08] Jinesh Gandhi from Motilal Oswal enquired if there’s stability and recovery in the CNG market and what was the CNG sales for FY23. Nikhil Vyas GM replied that last year, 330,000 CNG cars were sold and this is expected to grow. There is positive traction after the government rationalized prices. CNG penetration for the full year was at 20%.
- [00:38:56] Chandramouli Muthiah of Goldman Sachs asked what’s driving the normalization of the strong hybrid variant mix for the Grand Vitara model and what are the company’s plans for strong hybrid technology for other utility vehicles in the portfolio. Nikhil Vyas GM said it is normal for the topmost variant of a new model to have higher sales initially before normalizing. The strong hybrid technology has received positive response and the company plans to bring it to more models.
Cochin Shipyard Limited (NSE:COCHINSHIP) Q4 FY22 Earnings Concall dated May. 26, 2022 Corporate Participants: Madhu S Nair -- Chairman & Managing Director Jose V J -- Director Finance Analysts: Vastupal Shah
Can you guess the name of the company that was listed during the IPO frenzy in 2020 and is the second largest player in the Indian municipal waste management industry?
“Hey, how is the market doing today?” “Oh!, its falling tremendously since morning” I am sure news like these might be a common topic of discussion for you nowadays. Interestingly,