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- 06 Mar 2023
- ICICIdirect Research
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MARUTI SUZUKI INDICATES RESURFACING CHIP SUPPLY SHORTAGES
MARUTI - 12397 Change: -79.00 (-0.63 %)News: As per media sources, Maruti Suzuki (MSIL) has indicated about resurfacing of concerns over chip shortages effecting production in coming quarters. This is amidst ~46,000 units of production loss in Q3FY23. Company expects its order book to increase due to continuing chip issue and reach ~3.7 lakh units. Current highest order backlog is for its MPV i.e. Ertiga at ~94,000 units followed by Brezza (~61,500 units) and Grand Vitara (~37,000 units). Encouragingly, it also indicated ~22,000 & 12,000 pre-bookings for Jimny & Fronx respectively. Management also indicated at the industry level, domestic PV sales at 38.8 lakh units in FY23E (up 26% YoY) with growth seen at 5-7% in FY24E
Views: This comes as a negative surprise as management commentary from various OEMs during recent quarterly concalls was positive towards improving chip supplies, however in recently disclosed wholesales numbers M&M informed about chip shortages effecting production capabilities with MSIL too sounding production alert for March 2023 on account of the same. We would further await clarity on the same before revising our estimates. For MSIL post healthy FY23E (at ~19.6 lakh units, up ~20% YoY), we have built in 12.5% volume growth for FY24E at 22.1 lakh units
Impact: Negative