Maruti sells some 20 Lakh cars per annum.
With annual net profit of 8k Cr in FY 23 and average car price of 6L, it earned around 40k profit per car which is 6.5% net margin.
In 2022, profit was only around 4k. Hence, net margin was around 3.25%
With most of its plants already fully depreciated and huge cash reserves, it just uses its pricing power to capture market share.
Similar is the story of Indigo which uses sale and lease back to earn huge money every year. It has negotiated heavy discount for the aircraft purchase which then it sells at market rate.
Trade like a pro with our intraday bank nifty option tips and be on the right side of the market always and every time.
These things cause moat.
Not a recommendation to buy either. Maruti story is almost done is my view. Hereon disruption will come from EV space.
