Maruti Suzuki Stock Valuation.
MARUTI SUZUKI INDIA LTD.
Maruti Suzuki India Limited manufactures, purchases, and sells motor vehicles and spare parts primarily in India and internationally. It offers 15 brands and approximately 150 variants, primarily including passenger cars, vans, utility vehicles, sedans, SUVs, MUVs, and life utility vehicles. The company is also involved in the facilitation of pre-owned car sales, fleet management, and car financing. It operates through a sales network of 1,100 outlets 801 cities; and 2,958 service points in 1,408 cities in India. The company, formerly known as Maruti Udyog Limited, was founded in 1981 and is headquartered in New Delhi, India. Maruti Suzuki India Limited is a subsidiary of Suzuki Motor Corporation.
Headquarters: New Delhi
Products: Automobiles
Revenue: 37522 crs.
Net income: 2288 crs.
Website: www.marutisuzuki.com
Following data for Maruti Suzuki has been assumed and obtained: * The share prices of maruti Suzuki listed on NSE have been considered for the past five years taken monthly. * The NSE index has also been considered for the past five years taken monthly. * The growth rate for both share price of maruti Suzuki and NSE has been obtained using formula =LN(price of current period/price of previous period). * Then an average for both has been calculated and subsequently variance has been calculated. Also, Co-variance of both the growth rate series has been calculated. The average growth rate of NSE index is the Return of market denoted by Rm. * Then, BETA is calculated by dividing Co-variance by variance of market. * Now, The CAPM model is applied to calculate Cost of capital of Equity i.e. Ke= Rm-(Rm-Rf) BETA. The risk-free rate is assumed to be 7.5%. * The capital structure of maruti Suzuki is drawn and subsequently the WACC is calculated taking cost of capital which has been calculated using CAPM model. * Now, we apply the dividend discounting model to calculate the present value of the share;
Maruti Suzuki India Limited manufactures, purchases, and sells motor vehicles and spare parts primarily in India and internationally. It offers 15 brands and approximately 150 variants, primarily including passenger cars, vans, utility vehicles, sedans, SUVs, MUVs, and life utility vehicles. The company is also involved in the facilitation of pre-owned car sales, fleet management, and car financing. It operates through a sales network of 1,100 outlets 801 cities; and 2,958 service points in 1,408 cities in India. The company, formerly known as Maruti Udyog Limited, was founded in 1981 and is headquartered in New Delhi, India. Maruti Suzuki India Limited is a subsidiary of Suzuki Motor Corporation.
Headquarters: New Delhi
Products: Automobiles
Revenue: 37522 crs.
Net income: 2288 crs.
Website: www.marutisuzuki.com
Following data for Maruti Suzuki has been assumed and obtained: * The share prices of maruti Suzuki listed on NSE have been considered for the past five years taken monthly. * The NSE index has also been considered for the past five years taken monthly. * The growth rate for both share price of maruti Suzuki and NSE has been obtained using formula =LN(price of current period/price of previous period). * Then an average for both has been calculated and subsequently variance has been calculated. Also, Co-variance of both the growth rate series has been calculated. The average growth rate of NSE index is the Return of market denoted by Rm. * Then, BETA is calculated by dividing Co-variance by variance of market. * Now, The CAPM model is applied to calculate Cost of capital of Equity i.e. Ke= Rm-(Rm-Rf) BETA. The risk-free rate is assumed to be 7.5%. * The capital structure of maruti Suzuki is drawn and subsequently the WACC is calculated taking cost of capital which has been calculated using CAPM model. * Now, we apply the dividend discounting model to calculate the present value of the share;