- 19 Aug 2024
- ICICI Securities
MARUTI SUZUKI'S PAT IMPACT IN Q2FY25
MARUTI - 12408 Change: 18.00 (0.15 %)News: Maruti Suzuki in a regulatory filing has informed exchanges that due to the withdrawal of indexation benefit in Finance (No.2) act 2024 while calculating long term capital gains on debt mutual funds which were purchased prior to April 1, 2023, it will raise its deferred tax liability provision by ~₹ 850 crore. This one-time adjustment will have an impact on PAT in Q2FY25.
Views: The company has prudently made this disclosure with amount of tax outgo, might be different than the above-mentioned amount of ~₹850 crore based on the actual gain and actual applicable rate of tax at the time of redemption of these debt mutual funds. The company has a cash balance of ~₹ 54,000 crore as of FY24 end and this tax outgo increase is not significant in nature. We continue to have a neutral view on the company amidst not so exciting product profile vs. peers, tailwinds from rise in CNG penetration domestically and aggressive capacity expansion underway in India.
Impact: Neutral