![]() Technical Picks: Cholamandalam Finance, Rain Industries, Balkrishna Industries, Ambuja Cements and Zinc (These are published every trading day before markets open and can be read on the app).The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. TCS CEO Krithivasan’s new operating structure gets mixed response from industry experts Gilt Funds: Is it time to jump on to the roller coaster of returns? India an upper middle income economy by 2030? StanC analysts strongly believe so Praj Industries: What's got the ball rolling? How drugs for obesity and Alzheimer's propelled Eli Lilly to the topīengal: Will opposition votes get split between BJP and Left-INC-ISP in 2024? Naturally occurring hydrogen could change the world, if we understood it Market optimism about convergence in the global economy is overdone (republished from the FT) What record plant availability at NTPC tells us about Indian power sector India’s warehousing and logistics sector is in the midst of a boom How to safeguard your business from fake vendors and GST fraudsĭirect listing on GIFT City could open Pandora's box for Indian exchanges IDFC First Bank needs an opex fix to remain in good books of investors Reading charts alone won’t make you a good trader ![]() Indian manufacturing one of the star performers globally, PMI numbers show Pro Economic Tracker | Consumer sentiment perks up Nazara Technologies Q1 FY24: Robust numbers growth initiatives look promisingĭCB Bank: Some misses in Q1 performance but risk-reward remains favourable Mahindra Finance Q1 FY24: What’s making us optimistic for the long term? Investing insights from our research team Read our research team’s analysis of the results. The company expects to outperform the passenger vehicle industry. Meanwhile Maruti Suzuki India reported a decent performance in the June 2023 quarter, helped by traction in its recently launched passenger vehicles. Investors will watch out for the terms of the deal - the consideration payable to the parent and in what form. With SMG's plant already operational, benefits of the acquisition should show in Maruti Suzuki India’s numbers sooner than later. ![]() Of course, circumstances dictate business decisions and Maruti Suzuki may deem it fit to absorb SMG now. Competition moved quickly and grabbed market share. Even though Maruti Suzuki India is still India’s largest passenger car producer, it lagged in utility vehicles. “The additional funds available with Maruti Suzuki India could enable us to strengthen our marketing and sales infrastructure, R&D, and overseas market penetration,” the company had said then.Īs it turns out, the additional resources did not particularly help Maruti Suzuki maintain its dominance in the domestic market. Maruti Suzuki listed a host of benefits of the contract manufacturing agreement with SMG, including the savings it will realise from not investing in a new plant. When Maruti Suzuki proposed the transaction with SMG a decade ago, retail and minority investors were displeased. Moreover, Maruti Suzuki explains that the acquisition will help it reach its production capacity target of 40 lakh cars per annum by 2030-31.Įven so, one cannot help but wonder at the change of heart. The buyout would bring in greater flexibility in production, writes Vatsala Kamat in this piece. “Maruti Suzuki India would now be perceived as an automobile manufacturer, instead of being considered as a part trader (40 percent traded volumes in Q1 FY24) due to this existing unique structure,” analysts at Nuvama Institutional Equities said in a note.Īs SMG comes into its fold, Maruti Suzuki aims to derive better production and operation efficiencies. So, if Maruti Suzuki acquires SMG shelling out cash at book value, then the acquisition can dilute earnings as it risks losing income on the cash it currently holds.įor parting with cash, Maruti Suzuki will get direct control of the plant that produces as much as 40 percent of its volumes. As per analysts, SMG generated a net profit of Rs 23 crore or so in FY22. Its book value is pegged at Rs 12,700 crore.ĭetails of the acquisition are yet to be crystallised, whether through cash payment or share swap. SMG is a subsidiary of SMC and operates an automotive manufacturing plant in Gujarat, which sells its production exclusively to Maruti Suzuki. On July 31, the board of the Maruti Suzuki decided to acquire Suzuki Motor Gujarat (SMG) from its parent Suzuki Motor Corp (SMC), possibly at book value. After handing over a portion of its manufacturing to a subsidiary of its parent, the company now says it is better off doing it by itself. ![]() Business decisions are not always cast in stone. ![]()
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