Target: ₹11,500
CMP: ₹9.071.95
Incremental sales from full model change Baleno, Brezza and recently launched Grand Vitara now contributes 15 per cent of MSIL’s domestic volumes.
All the new launches in current product cycle have been successful so far, on the back of strong customer response. Our channel checks suggest, initial customer feedback for Fronx has been positive owing to its distinct styling and attractive pricing (esp. entry to mid variants) and enquiries have started picking-up post launch and price reveal.
Jimny’s launch is expected in May’23/Jun’23 and we expect the model to do-well on the back of strong brand perception.
With these launches, MSIL’s presence in B-segment will strengthen further with 6 models on offer vs. 2-3 from competing brands. After two consecutive years of market share loss, we believe that MSIL is at the cusp of market share recovery led by new launches. Healthy order book, favourable mix and operating leverage tailwinds will further support strong performance going ahead.
We ascribe 25x PE to arrive at Mar’24 fair value of INR 11,500. Re-iterate Buy.
