Maruti Suzuki India Ltd Q3 2022 Earnings Call Transcript

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

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : My question was mostly on the raw materials side. This quarter, we have seen a sequential decline in raw material sales. And even on a raw material per vehicle basis, the costs have come down. Can you help us understand as to any particular commodity that has helped, or has there been a reset in the steel or aluminium contracts with the suppliers?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : And can you remind us as to how often do your steel contract is , is it like 6 months, because while the sale in December quarter, global steel prices are again up. So what's the lead and lag there, if you can help us understand?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Understood. And just one more thing on the currency. Can you just remind us what is your yen exposure? Because obviously, royalty is now fully in rupees. So what is the yen exposure, as we stand today?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Okay. And from the vendor side, like you used to mention as a percentage of revenues, what is the extent?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. So JPY 30 billion plus JPY 50 billion, direct [30%].

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : And that would be an offset on the exports, right? Exports is mostly dollars? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2022 / 10:30AM, MRTI.NS - Q3 2022 Maruti Suzuki India Ltd Earnings Call

Question: Pramod Amthe - CIMB Research - Analyst : This is with regard to new product launches. It seems because of the semiconductor challenges, some of them got delayed to come through for FY '22 pipeline. In that context, how are you looking at your planned launches for the remaining products? Do you still maintain the timeline on the yearly launches? Or are you deferring the medium-term launch plans, considering that you need to maintain some gap and momentum to be built up on new launches? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2022 / 10:30AM, MRTI.NS - Q3 2022 Maruti Suzuki India Ltd Earnings Call

Question: Pramod Amthe - CIMB Research - Analyst : Sure. Second one is with regard to exports. Considering that this year, we are seeing a sharp jump. I wanted to know, what is your medium-term plan, in terms of taking this exports as a proportion of these sales? And I also wanted to get your thoughts, in terms of you have also applied for Auto PLI. How does that fit in the overall scheme of things?

Question: Pramod Amthe - CIMB Research - Analyst : And specific to you, yours is more focused on exports for PLI application or more about the -- because [operation] will come through for venture, right? .

Question: Aditya S. Makharia - HDFC Securities Limited, Research Division - Analyst : Yes, sir. Just on the follow-on question with Toyota joint development. So there's a lot of news about FY '23 being a big year for Maruti because you will launch 2 to 3 SUVs. Now, I know, directionally, you will not comment on exact models, but can we expect something quite sizable coming into next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2022 / 10:30AM, MRTI.NS - Q3 2022 Maruti Suzuki India Ltd Earnings Call Unidentified Company Representative So as I explained, yes, we have a plan to further strengthen our portfolio in different segments, including the ones where we are currently weaken. So we can expect a good strengthening of the portfolio in the coming year.

Question: Aditya S. Makharia - HDFC Securities Limited, Research Division - Analyst : Sure. And sir, just the last question on market share because you had lost market share in the first 6 months due to chip shortage. Now, we see Hyundai is really on the back foot, on that count. So will that also enable us now to catch up on where we actually should be at the 50% mark?

Question: Aditya S. Makharia - HDFC Securities Limited, Research Division - Analyst : Sure. Congratulations for a good result and a very positive commentary. Thank you.

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : My first question is on the commodity inflation side. So how much of it is still under recovered (inaudible)? And in a scenario that commodity prices remained flat in quarters ahead, will you be passing this on, gradually, to customers?

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : How much was the under recovery on the commodity side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2022 / 10:30AM, MRTI.NS - Q3 2022 Maruti Suzuki India Ltd Earnings Call

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : Got it. My next question was about the market share. A lot of discussion has happened on this call as well and outside as well. And Mr. Srivastava also said that white spaces is one of the areas in which we can potentially work, especially in the SUV space, to get back the market share, the overall market share. So why don't we disclose the model launch plan? And not specifically models, but at least quantify that, the number of officials or new launches, which we are planning to do this year or for a longer duration of time, say, 5 years, like many of our competitors, locally and globally, also does this. So can we get some indication about the model launch plan, not by disclosing any specific model per se?

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : Got it. I was referring to just quantify the number of models you plan to launch, without disclosing which specifically...

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : Fair enough. One final question on the CapEx side. So this year's CapEx is at a higher level, compared to our recent trend, partly because we are going to make land purchases this year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 25, 2022 / 10:30AM, MRTI.NS - Q3 2022 Maruti Suzuki India Ltd Earnings Call So is that trend likely to continue in FY '23 as well? Or this land purchase-related additional CapEx was one-off for this year?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, my first question is on market share. Now, if you look at the SUV segment in particular, nearly 35%, 40% of volumes, at an industry level, is actually diesel. And in that backdrop, how do we see our market share in SUV, even with the new launches? Is CNG a viable option within the SUV space at all? Or you think, [CNG] will not work in SUV?

Question: Ashish G. Jain - Macquarie Research - Analyst : CNG is an option in SUV?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, my second question is on the airbags and all. Can you give a sense of what will be the cost implications and all, if the regulation goes through in the current form? Unidentified Company Representative So as of now, we are not getting too much into the cost. There's an implication of semiconductors. There is an implication of lead time or delivery. So it is a comprehensive topic in itself. We are in discussion with MRTH. And I think, at an appropriate time, we will share the findings.