Full Year 2023 Maruti Suzuki India Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst : Sir, my question is a follow-up to what Kapil asked. Can you just help us understand because of the kind of changes in the models we've done, the kind of feature enhancements that you've done and the changes to the transmission. What has been the kind of jump in the average consumption of semis for you because the market has a difficulty in believing that we've been continuously plagued with semiconductor shortage for more than a full year now, and it's not expected to resolve any time soon. But just want to understand, within Maruti, given the model mix what you enjoy currently, what has been the kind of semi intensity increase what you've seen on a year-on-year basis on a form one basis, if you average number what you had earlier, what is it now? So that we can better associate the kind of scale of issues that you're facing? And second question was on the demand for the entry-level car segment. We continue to see that category continues to shrink. So according to you, where do you think demand could settle on the lower side for that segment? And what will be needed from a macro perspective for that segment of first-time buyers and local buyers to kind of make a [lakh]. Unidentified Company Representative On the first question, yes, because of higher functionality, premium features, technology, infotainment, the semiconductor content in the car has gone up. It's difficult to put a number because it's a model-wise, variant-wise phenomenon. Having said globally also, one of the reasons -- one of the drivers of semiconductor consumption increases, larger cars and some EVs in Europe also. So I think all manufacturers are affected. Everybody complains about semiconductor shortages. Everybody has pending bookings. So it's an industry-wide phenomena. And one element that sometimes hurts more is that when semiconductor manufacturers they peg the New Year allocations based on past base figures. So that sometimes works to disadvantage. Your second question was on.

Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst : So out of the factory positive because generally, we've been picking up the entry-level demand continues to be under pressure for the industry wide, and it's declining even now. So you -- but you expect that it could be flattish on a full year basis? Unidentified Company Representative So in the backdrop of low expectation, this is somewhat positive. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 26, 2023 / 11:30AM, MRTI.NS - Full Year 2023 Maruti Suzuki India Ltd Earnings Call

Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst : And I have one last one. Other expenditure any comment on the (inaudible) lumpy expenses this quarter because that will probably not recur for the next 2 quarters I think. So any color there as to what -- how big was that?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : My question was on this capacity announcement and the CapEx number. So I think this year, you spent around INR 6,000 crores. And it seems from some press releases -- from the press comments, it's INR 8,000 crores for next year. And there's a talk of 1 million capacity. So this 1 million capacity will be coming in the same place where you're doing the 250,000 Haryana? And what would be the time line for that? Rahul Bharti - Maruti Suzuki India Limited - Executive Officer of Corporate Planning & Govt. Affairs & Chief IR Officer No. The 250,000 Haryana is the first plant in the Kharkhoda site District Sonipat. And Kharkhoda site has room for 4 such plants going up to 1 million. What the board approved today in principle was additional to this 1 million -- 1 million in addition to what we have in Kharkhoda. But it's set a preliminary stage more groundwork needs -- this is an in-principle approval. More ground work needs to be done, where, how, what, at what cost all that needs to be done.

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. And just lastly, can you confirm the INR 8,000 crore CapEx number? And what it would be spent on for next year? That's all from my side.

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : So the first question is with regard to the sourcing from Toyota. So there have been some talks about capacity expansion of 30% happening there. Will it also benefit you sort of think of products on there. Any thoughts? Unidentified Company Representative So of course, since there is a constraint, so we are negotiating all the time. And if there is any increase, we'll let you know.

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : But we were looking for a payout, right? What you ultimately and you give us because the last time the payout policy was announced when the it set up the plant to get that comfort. So I just wanted to get directionally how are you guys looking at managing the resource. Rahul Bharti - Maruti Suzuki India Limited - Executive Officer of Corporate Planning & Govt. Affairs & Chief IR Officer So of course, as you rightly mentioned, most of this -- most of the CapEx on new capacity can be met through internal accruals. And hopefully, it should happen through positive free cash flows. So the dividend question always remains with us. And the last word on technology has not been said, the auto industry is going through a major transformation. It's not just technology, it's business models also. So many areas where we might need investment. So we are watching. But you would have noticed a calibrated increase in trend in the dividends also.