Lowers production guidance for March 2022MARUTI - 7417 Change: -149.60 (-1.98 %)
News: As per media reports, MSIL has guided for lower MoM production volumes to its vendors for March 2022 at ~1.4 lakh units vs. 1.7 lakh units clocked in February 2022. It said the reason for the same is constraints over semi-conductor chip availability.
Views: This comes as a negative surprise as the company sounded confident of MoM increase in production in the near term amid robust order backlog and improving chip availability in the latest analyst call held in January 2022. One probable reason for constraint over chip availability could be ongoing conflict between Russia & Ukraine, which dominantly produce critical raw materials (neon gas, precious metals) for chip manufacturing. With production & dispatches nearing 1.4 lakh units, total volumes for MSIL are expected at 16.2 lakh units for FY22E vs. our assumption of 16.6 lakh units.