Here are pointers that explain how important this facility is for the company:
• The Manesar facility has a capacity of 550,000 vehicles per annum. It accounts for a third of the company’s production capacity.
• The plant assembles or makes popular and profitable models like Swift, Dzire, SX4, A-Star and the newly launched Ertiga. The average realisation of sales or revenue per car at Manesar is Rs 4,00,000 against overall realisation of Rs 3,00,000.
• According to analysts, if the plant closes for more than 7 days, it could hurt the company’s net profit. In an interview to NDTV Profit, Amit Kasat, Director, Standard Chartered Securities, said that the Manesar is important for Maruti as the plant has a capacity of 550,000 vehicles per annum. It accounts for a third of the company’s production capacity.
“However, Maruti still remains our top pick. We give an ‘outperform’ rating to the stock. Invest with a target price of Rs 1615 per share,” he said.
Apart from Maruti Suzuki, Bajaj Auto, TVS and Ashok Leyland are his top bets.
• Analysts calculate that if the plant is closed for a day, it costs Maruti Suzuki Rs 73 crore in revenue and Rs 8 crore in operating profit. If it closes for two weeks, the sales loss could be Rs 1,100 crore and operating loss of Rs 121 crore.
• Maruti sold 96,597 vehicles in June 2012. The company reported a net profit of Rs 1,409 crore over net sales of Rs 36,069 crore for the year ended March 2012.