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Company Profile

In February 1981, the Indian government founded Maruti Udyog Limited, a joint venture with Suzuki. Maruti launched its first production unit in Gurugram of Haryana, in 1982. The Indian division of Suzuki Motor Corporation, a Japanese carmaker, is called Maruti Suzuki India Limited. When Maruti was first founded in 1982, the Indian government held the majority of the company; Suzuki only acquired a 26% share. The Indian government sold all of its remaining shares to Suzuki Motor Corporation in 2007 after progressively reducing its ownership and leaving the company in part in 2003. As of now, this passenger car company is having 40% market share as of August 2024.

Auto Industry in India

•   The automobile industry is essential to both macroeconomic growth and technological innovation, it has historically been a reliable gauge of the state of the Indian economy. Because of India’s youthful population and expanding middle class, the two-wheeler category leads the industry in terms of volume.

•  A total of 23,58,041 passenger cars, three-wheelers, two-wheelers, and quadricycles were produced as of April 2024. India’s total automobile exports in FY23 were 47,61,487. This sector’s share of the national GDP increased from 2.77% in 1992-1993 to around 7.1% presently. About 19 million people are directly and indirectly employed by it.
•   Furthermore, a number of measures implemented by the Indian government, including the Automotive Mission Plan 2026, the scrappage policy, and a production-linked incentive program, are anticipated to position India as a global leader in the two- and four-wheeler markets. The Indian passenger car market is projected to grow at a compound annual growth rate (CAGR) of more than 9% between 2022 and 2027, from a value of US$ 32.70 billion in 2021 to US$ 54.84 billion. 23,36,255 passenger cars, three-wheelers, two-wheelers, and quadricycles were produced in total as of June 2024.

•   A number of factors, including the affordability of skilled labour, the strength of research and development facilities, and low-cost steel production, are critical to the automobile industry. Both skilled and unskilled labour can find direct and indirect employment in this industry, as well as an excellent investment opportunity. 
•  The production linked incentive scheme (PLI) for automobiles and auto components has so far drawn a proposed investment of  Rs. 67,690 crore (US$ 8.18 billion), according to Economic Survey 2023–24. The Indian government anticipates that the automotive industry will draw $8–10 billion in domestic and international investment. By 2030, India may lead the world in shared mobility, opening doors for electric and driverless cars.

COMPANY PERSPECTIVE AND REVIEW

•   Maruti Suzuki has shown notable increases in equity and assets, particularly in non-current assets and investments, indicating robust investment in infrastructure and important areas. The business has demonstrated effective liquidity management by growing its cash reserves while keeping short-term borrowing levels low.
•  Growing trade payables, trade receivables, and other current liabilities all suggest that operations may be expanding or that business activity may be ramping up. The balance sheet shows the company’s strong financial position and sets it up for future growth with increasing reserves, minimal long-term debt, and sizable investments.
•   For the fiscal year that ends in March 2024, Maruti Suzuki India has declared an equity dividend of 2500.00%, or ` 125 per share. At the current share price of Rs.12289.00, the dividend yield is 1.02%. The company has a solid dividend track record and has consistently declared dividends for the last five years.