Maruti vs Bajajfinsv Q1 FY24

Maruti Suzuki reported a strong Q1 FY24 with revenue of INR 30,845 crore (+22% YoY) and PAT of INR 2,485 crore (+145% YoY), driven by higher volumes, improved realization, and cost reduction. Domestic sales grew 9.1% to 434,812 units, while exports declined. The company launched three SUVs (Fronx, Jimny, Invicto) and achieved a 20% SUV market share. CNG penetration hit a record 27% with 113,000 units sold. Management announced plans to acquire Suzuki Motor Gujarat (SMG) to integrate production and target 4 million units annual capacity by 2030-31. Pending orders stood at 355,000 vehicles. Risks include ongoing semiconductor shortages (28,000 units lost in Q1) and potential demand slowdown in small cars.

Guidance read

Acquire SMG by March 2024: Board approved acquisition of Suzuki Motor Gujarat shares from SMC, to be completed within FY24 at net book value. Target 4 million units capacity by 2030-31: Production capacity to double from current levels, with 1 million capacity at Kharkhoda and additional 1 million under study. EV launch in next financial year: EV manufacturing facility at SMG will be part of MSIL; launch expected in FY25.

Risk read

Key risks include Semiconductor shortage persists — Electronic component shortages caused 28,000 units of lost production in Q1; limited visibility on supplies.; Small car segment slowdown — Small car share declined to 32% of industry; first-time buyer ratio fell to 40% from 42-44%.; Discounts and inventory pressure — Discounts increased to INR 16,214 per vehicle from INR 12,748 YoY; dealer inventory at 125,000 units (~4 weeks)..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Bajaj Finserv reported a strong Q1 FY24 with consolidated PAT up 48% YoY to INR 1,943 crore and total income up 47% to INR 23,280 crore. The general insurance arm (BAGIC) posted a combined ratio of 100.7% (vs 104.6% last year) driven by lower loss ratios in motor and commercial lines, while life insurance (BALIC) grew individual WRP by 15% despite a high base. Bajaj Finance continued its momentum with AUM growth of 32% and record low GNPA of 0.87%. Management highlighted strong distribution expansion in BAGIC and product mix normalization in BALIC post-Q1 tactical shifts. Key risks include intensifying competition in crop insurance due to EoM arbitrage and potential flood claims in Q2 from North Indian rains.

Guidance read

BALIC to maintain NBV growth in line with past trends: Management expects absolute NBV to grow at a similar pace as historical 24% rolling 12-month growth, with margins stabilizing around 15%. BAGIC to sustain motor growth for 1-2 years: Expansion in distribution and geographies is expected to sustain motor growth in the medium term, though market dynamics may affect it. BALIC product mix to normalize from Q2: After a tactical Q1 with higher ULIP share, PAR mix is expected to revert to December 2022 levels, with corrective actions already taken in July.

Risk read

Key risks include Intensifying competition in crop insurance — Private players are aggressively bidding for crop insurance to utilize EoM allowances, potentially compressing margins for BAGIC.; North Indian flood claims in Q2 — Heavy rainfall in North India may lead to elevated motor and property claims, though management expects material impact to be assessed only in Q2 call.; Health insurance loss ratio pressure — Retail health loss ratios remain elevated due to fraud and claims inflation; management is investing in analytics but improvement may take time..

Promise ledger

Scorecard data is being built as historical quarters are processed.