If you are a new investor in the stock market or or want to begin online investing, the first step is stock selection. Companies with a large market cap, strong brand presence and sales are a must-have in your stock or online share trading portfolio.
🚘 Maruti Suzuki – The Auto Sector Leader in India
Maruti Suzuki is synonymous with India stepping into an era of economic growth and the rise of India’s aspiring middle class. Maruti Udyog Limited, a Government of India enterprise founded in 1981, partnered with Suzuki of Japan and launched the iconic Maruti 800 in 1983.
Since then, Maruti has remained one of the most trusted brands in India and reigns a 49% market share in a highly competitive passenger car market.
Maruti Suzuki is one of the blue-chip large-cap stocks with a market cap of Rs 2,32,337 Crore as of 7th April 2022. At present, the Maruti Suzuki Share Price is Rs. 7,691. For a long term investor, it is essential to know some critical financials before looking at the stock price.
📝 Balance sheet of Maruti Suzuki for FY 2021
| Total Assets | 71,282.70 |
| Total Assets Growth % | 12.03 |
| Total Liabilities | 18,782.10 |
| Total Liabilities Growth % | 32.31 |
| Total Equity | 52,500.60 |
| Total Equity Growth % | 6.21 |
| Current Ratio | 1.15 |
| Total Debt to Equity | 0.01 |
| Contingent Liabilities | 15,704.30 |
🔑 Key ratios of Maruti Suzuki for FY 2021
| Return on Equity % | 8.36 |
| Return on Capital Employed % | 9.52 |
| Return on Assets % | 6.15 |
| Interest Coverage Ratio | 51.61 |
| Asset Turnover Ratio | 98.72 |
| Price to Earnings | 47.39 |
| Price to Book | 3.95 |
| EV/EBITDA | 24.69 |
| EBITDA Margin % | 11.77 |
📈 Maruti Suzuki share price details
| Market Cap | Rs. 2,32,337 |
| Share Price | Rs. 7,691 |
| 52W High | Rs. 9,050 |
| 52W Low | Rs. 6,400 |
| P/E Ratio | 71.6 |
| Book Value | Rs. 1,730 |
| Dividend Yield | 0.58% |
| ROCE | 5.20% |
| ROE | 4.40% |
| Face Value | Rs. 5.00 |
Let us look at some insights from financials
- The annual sales have grown steadily over the last 10 years. From Rs 29,592 cores in 2010, the sales have grown to Rs. 85,615 in the trailing 12 months till now. The net profit grew from Rs. 2,625 crores in 2010 to Rs. 7,649 crores in March 2019 before plateauing during the pandemic and stabilising again to Rs. 4,389 crores in March 2021.
- This year, there is an expected upside due to high commodity and raw material costs cooling down and a growth in demand after the pandemic easing with an increase in car prices.
- Despite being a core manufacturing company, Maruti Suzuki has nearly nil debt on its books, low debt and interest obligation and higher returns for shareholders.
- Maruti Suzuki has a total dividend payout of 31.49%. Major mutual fund houses hold the stock in their diversified equity portfolio schemes.
- The stock price has returned a CAGR of 12% in the last 10 years.
- The current Maruti Suzuki share price is 4.89 times its book value, much higher than its peers.
- The Return on Equity has been 12% for the last 10 years.
To Conclude
Maruti Suzuki is a long term stock to have in your online investing portfolio for high dividend yield, solid sales and fundamentally sound financials. The brand value, large service and showrooms network, world-class production facility and dominance in the small to medium cars segment make it an attractive buy and hold investment.
📌 You can also read about Top 5 Pharma Stocks & Top 5 Banking Stocks in India.
Happy Investing 😇
Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing.
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