- 05 Dec 2022
- ICICIdirect Research
Maruti Suzuki India indicates at production cut in December 2022
MARUTI - 12403 Change: -50.80 (-0.41 %)News:
In a regulatory filing, the company has informed exchanges about shortage of electronic components impacting December 2022 production more than that in the recent months. It has also informed about hiking prices of various models from January 1, 2023 due to inflationary cost scenario
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The production cut announcement comes as a negative surprise with some media reports indicating upward of 20% decline on an MoM basis at ~1.2 lakh units. This is way below our estimated 1.7 lakh unit monthly run rate and could lead to a miss on overall volumes in FY23E (~20 lakh units). We expect the stock to react negatively to this news flow but some comfort is seen in announced price hike resulting in margin recovery. This is also negative for ancillary players who count Maruti as their anchor client with prominent names in our coverage being Uno Minda, Motherson Sumi Wiring and PPAP Automotive
Impact:
Negative