Maruti Suzuki India Ltd
NSE:MARUTI
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
9 860.45
13 495.6
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Maruti Suzuki India Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day and welcome to the Q1 FY '24 Earnings Conference Call of Maruti Suzuki India Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Ambaprasad. Thank you. And over to you, sir.
Thank you, Darwin. Ladies and gentlemen, good afternoon once again. May I introduce you to the management team from Maruti Suzuki. Today, we have with us our CFO, Mr. Ajay Seth. From corporate, we have Executive Director, Corporate Planning and Government Affairs, Mr. Rahul Bharti; and General Manager, Corporate Strategy and Investor Relations, Mr. Nikhil. From finance, we have Executive Director, Mr. Pradeep Garg; and Vice President, Mr. Dinesh Gandhi.
The con call will begin with a brief statement on the performance and outlook of our business by Mr. Seth, after which we'll be happy to receive [indiscernible].
May I remind you of the safe harbor. We may be making some forward-looking statements that have to be understood in conjunction with uncertainty and the risks that the company faces. I'd also like to inform you that the call is being recorded, and the audio recording and the transcript will be available at our website. May I please note that, in case of any inadvertent error during this live audio call, the transcript will be provided with the corrected information.
I would now like to invite our CFO, Mr. Seth. Over to you, sir.
Thanks, Pranav. Welcome, ladies and gentlemen. I am pleased to report that Maruti Suzuki has demonstrated [ brilliance ] and maintained a steady course in the first quarter of the fiscal '23, '24. Let me start with some of the recent business highlights.
We've strengthened our product portfolio in utility vehicle segment. The company launched a premium 3 row utility vehicle, Invicto. With the launch of this, the company debuted in the INR 20 lakh-plus drive segment.
Coming to other business highlights. During the quarter, start of sales of 2 new SUVs, the FRONX and the Jimny, has positively contributed to the company's performance. Overwhelming response to these SUVs, coupled with the strong sales performance of other 2 SUVs, the Brezza and the Grand Vitara, the company posted a market share of about 20% in SUV segment during the quarter 1. Recently the company further expanded its [ dream car ] portfolio by opening 5 -- by offering CNG powertrain technology in FRONX. With this Maruti Suzuki now offers 15 models with factory-fitted CNG technology.
During the quarter, in the domestic market, the company sold a whopping 113,000 vehicles powered by CNG technology. This resulted in highest-ever CNG penetration of about said [ 27% ]. In the export market, the company expanded its portfolio by starting the exports of FRONX to destinations in Latin America, Middle East and Africa.
Coming to the business environment during the quarter. The company continued to face the electronic component shortage, particularly in the models witnessing high demand. The company could not produce about 28,000 vehicles in quarter 1 of this financial year. Pending customer orders stood at about 355,000 vehicles at the end of the quarter, and the company is making efforts to serve these orders fast.
Limited visibility on availability of electronic components is a challenging -- is challenge in planning our production. With the support of our suppliers and dealer partners; and efforts of our supply chain, engineering, production and sales teams, we managed to maintain healthy sales volume during the quarter. Going forward, we are hopeful on the improvement in supplies of electronic components.
Today, Maruti Suzuki Board approved acquiring shares of SMG from SMC. With the growth of the Indian car market and export potential, Maruti Suzuki India Limited would need to increase its production capacity to about 4 million cars per annum by 2030, 2031, almost double from current levels. This could happen over several locations, some of which are known and some being studied. On the other hand, given the carbon neutrality requirement, several powertrain technologies like EVs, hybrids, CNG, ethanol, et cetera will coexist for a reasonably long period of time.
Managing the scale and complexity of production with multiple powertrains under different managements would pose several challenges. The Board of Directors considered this; and decided that, for the purpose of efficiency in production and supply chain, it is best to bring all production-related activities under MSIL. Accordingly, the Board approved termination of the contract manufacturing agreement and exercising the option to acquire the share of Suzuki Motor Gujarat Private Limited from Suzuki Motor Corporation, subject to all legal and regulatory compliances, including minority shareholders' approval. The mode of acquisition, including consideration to be paid to SMC, shall be decided in a subsequent Board meeting.
In terms of actual production, logistics, sales and the costs thereof, there will be no change, as the cars earlier supplied by SMG as the contract manufacturer will now continue to be supplied as before.
Coming to highlights for this quarter. The company sold a total of 498,030 vehicles during the quarter, higher by 6.4% compared to the same period previous year. In the quarter, the sales in the domestic market stood at 434,812 units, up by 9.1% over that in quarter 1 of last year. Export sales were at 63,218 units, as compared to 69,437 units in quarter 1 of last year.
During the quarter, the company registered highest-ever quarterly net sales of INR 308,452 million, as against INR 252,863 million in quarter 1 of last year. The net profit in the quarter rose to INR 24,851 million from INR 10,128 million in quarter 1 of this year, a growth of 145.4% over that of quarter 1 of last year. This was on account of large sales volumes, improved realization, cost reduction efforts and a higher nonoperating income.
We are now ready to take your questions, feedback and any other observations that you may have. Thank you.
[Operator Instructions] The first question is from the line of Kapil Singh from Nomura.
Just with the decision that we have announced for acquiring the SMG plant, can we talk about have you thought what could be the timelines? And also you mentioned about mode or configuration, so will -- can it be -- will it be in the form of cash only? Or we will -- there can be other options like share swap at sector also which may be evaluated?
This part has not been deliberated, so far. It -- as we mentioned in the -- both in the press release and in the CFO speech in the beginning, this will be deliberated in a subsequent Board meeting. And we wish to complete it within this financial year, between -- within March '24.
Okay. And shall we -- will there be any efficiency gains here as well which will be there for the combined entity that you can envision?
Broadly speaking, yes, because production planning -- we have so many powertrains. We have the IC engine base. We have the EV base, the hybrid, so there would have been some challenges if we had not integrated them together. At least now the decisions will be far more agile. We can quickly make changes in the production plan, location plan, et cetera. And of course, MD also mentioned in the press conference before this some economies of scale also we are expecting.
Okay. Second question is on costs. We have mentioned that there is some 80 bps one-off costs. So if you could talk about that. And what is the normalized level of cost? And also just the overall industry outlook that you are seeing right now, competitive intensity, discount levels and inventory levels?
So this 80 basis points is on account of the, I think, one time where we have made some payments to employees on -- for retention-related payments. And this, as I had earlier also mentioned, would not be repetitive in nature. They will not occur in the next quarters. So that's the 80 basis points that we had mentioned in the note. So if you see the employee cost is inflated in this quarter because of these payments and also the retirement benefits which certainly come in the first quarter and not repeated in the subsequent quarters -- so that's one important one.
The second question that you asked, about discounts: Discounts have been slightly up compared to last year. Last year, discounts were at 12,748 per vehicle. Now it is at 16,214 per vehicle and also up from the quarter 4 of last year. Quarter 4 was 13,269. They're up to 16,214. I think, with the semiconductor situation easing and with the mix becoming better, discounts should all show progress, but you'll have to see how the markets behave in a given quarter. And accordingly, discounts would have to be maneuvered. December, normally -- the third quarter, normally the discounts are higher because you have the year-end clearance of your cars, but they will vary each quarter, as I mentioned.
And also the outlook and inventory levels, if you could talk about that, demand outlook and inventory levels?
So demand outlook is fine at the moment. If you notice, in Q1, industry grew by between 6.5% to 7% -- sorry, competitors. Industry minus Maruti grew by 6.5% to 7%, while Maruti could grow over 12%, so -- and since we have a good model lineup of recently launched mostly SUVs, we expect that momentum to continue. The only issue is that, in Q2, the last year base is very high, so while the absolute sales should continue, the growth figures might look less in Q2 because of a high base last year.
Inventory would be at 125,000 -- network inventories, at about 125,000 [indiscernible] at the quarter.
In about 4 weeks...
Obviously about 4 weeks.
We have the next question from the line of Pramod Kumar from UBS.
Before I go with the questions, just a clarification. If my memory serves me right: when we did this arrangement, there was this, worry that the consideration for a buyback of the plant may be at a higher value. So you are assured that it will be at a book value. So I just wanted to clarify that. So does it hold good even now as it...
So the contract manufacturing agreement, the way it's drafted and the way it's approved by the minority shareholders, clearly lays down the principle of that, if it is submitted at any given point in time, the purchase would be at the net book value. So it holds good. I think the contract manufacturing agreement is very clear about it. There cannot be a deviation from the approval given by the minority shareholders.
No, that's great to hear, sir. And so then the question from my side on the business side is, even on the other expenditure side, we've seen some uptick. I just want to clarify. Is it related to the -- what we've heard from other companies as well related to IPL spends? And also you had a couple of launches, so is that -- is it fair to assume that the recurring run rate may be a bit lower than where we are today? Or you think these are going to be the sustainable levels. On the second one...
No. One I have mentioned to you is that there is some 80 basis point expenditure on account of employee costs, which is not recurring in nature, because we had to account for these in the first quarter as we had paid some retention bonuses, et cetera to employees for a long-term retention of employees, but other expenses, it will depend on the period in which the launches takes place or the events take place. It may vary a little bit, but marketing expenses as we launch more models will continue to be at this pace in the near future. So this is an investment we are making in the long run, not in -- not for a shorter period. They will remain to be a little stepped up.
And sir, from your vantage point, how do you see the evolution of your model mix from where we are today? Because we've seen a pretty good improvement in both ASP and gross margins -- gross profit per vehicle quarter-on-quarter, but how do you see it going forward as the capacity -- semiconductor situation eases? And also how -- if you can just help us understand how do you see the major cost elements within your P&L like -- of commodity? And some bit of -- any comments on ForEx? That should be very helpful.
Volume mix, as semiconductor situation improves, should improve because we will be in a position to sell more of the SUVs and other cars, as they are -- a large number of them are also in the wait list. So hopefully I think, the realization should also improve as the mix improves in the next quarters. And it has eased a bit, but we'll know exactly, when we finish the second quarter, in terms of where we are. But it seems to be better than where we were in the first quarter. That's the answer to the first question.
Second, on the commodities, now I think we have kind of stabilized. We will wait to see how the steel behaves. We had some uptick in the first quarter, but hopefully, it should correct moving forward. So we are seeing more stability both in commodities and ForEx during the year compared to the volatility that we used to see in the earlier years. So while there may not be significant improvement, cost improvement, but -- there is not going to be any more pain that we have seen in the past, but additionally, the cost reduction efforts that we put in, which used to be offset because of these commodity increases, may help us as we continue to stick to our targets of cost reduction as we normally have during the year.
Okay. So before I fall back in the queue, just a clarification. Does it include even the EV facility, the EV assembly plant? And also what will be the status of the battery plant, sir? Because I guess there will be some involvement of Toyota as well there. So if you can just help us understand those aspects on the EV side?
So the EV part. EV manufacturing facility is part of SMG. And since SMG will be part of MSIL if, I mean, everything goes through -- so EV will also come to MSIL. The battery is a global project of Suzuki. It has been located in India, because the volumes in India for Suzuki are the maximum. So that will be part of SMC, a 100% subsidiary called SRDI, Suzuki R&D India Limited.
The next question is from the line of Raghunandhan N. L. from Nuvama Institutional Equities.
Just a clarification on SMG. As per the data available on MCA, the networth was about -- or the book value was about INR 12,700 crore for last 3 years. So broadly that would be the latest book value for FY '23?
So yes. So that is the book value as of March 2023. And we will have to -- wherever this whole approval process is over, we will have to compute the book value at that point in time, so we will have to wait till the whole process of approval is over and then compute the book value at that point in time, but it should not significantly change from what you will see in March next year.
On the raw material cost benefit, just continuing the previous question. Precious metal cost per unit was around INR 25,000 to INR 30,000 for Maruti. And on precious metal side, there has been a very significant correction over the past few months. In addition, even costs like aluminum and all have come down, so then that leads to a more significant benefit in Q2 or Q3 for us?
So commodities have seen a decline, as you are saying, both palladium and rhodium, which are the quantities that we significantly consume in our production. Those have gone down. One has gone down by 18% and the other one has gone down by 20%. So there is definitely a benefit of commodities, but on the contrary, steel has increased in this quarter.
So there has been an increase of steel prices compared to quarter 4. So quarter 4, we saw a decline, but we had to give increase in the steel prices. Steel is almost half the commodities that we consume. And therefore, overall impact is not significant, as I said, because it has offset the reduction that we have got on the precious metals, but hopefully, now moving forward we should see some softening on steel as well, which will help the overall cost.
Got it, sir. On the demand side, order book now stands at INR 3,55,000. A notable part of that will be SUVs. Considering improving supplies, what would be our capacity on the monthly SUV production side? And relating to that, if you can talk a bit about volume potential for FRONX. Can it do 12,000 to 15,000 per month, including exports? And what would be the order book for FRONX?
I'll take your last question first. FRONX, currently we are doing approximately 9,000. And exports have just started, so exports volume we'll add to it. And order book on FRONX, we have about 22,000 pending bookings on FRONX. And on the overall volume, the capacity is fairly stable now. We will add 1 lakh in Manesar only next year. And semiconductor situation has almost eased, so we should see some stability in volumes.
Got it, sir. If you can share the exports and SMC production number -- I mean, SMG production number. That's all from my side...
SMG was about 40% of total, about INR 2 lakhs and -- you're talking about the export revenue?
Yes, sir.
In the quarter -- was about INR 37.60 crores approximately.
We have the next question from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
A couple of questions from my side. First is the FX impact in 1Q. Would there be a material impact on account of vendor imports given JPY movement in fourth quarter?
Not significant enough. I think -- or there is some fall impact, but not significant.
Okay, okay, got it. And can you remind us with respect to JPY hedging? Have you resumed the JPY, USD hedging now?
We have been continuously doing JPY, USD hedging. We have about 50% of our [ directory ] exposure covered. And we continue to look at opportunities wherever we find that this is an opportunity we do hedge. We also have to look at the forward premium category on point in time so that we are not too much off the market. So we have taken a collaborative tone of hedging as and when we get the right opportunities. And as I mentioned, we are almost 50% hedged for the year.
Got it. And lastly, now with SMG being merged into -- or being now part of MSIL, can you also talk about what will be -- what is SMG's CapEx plan going forward from where we are at 750,000 capacity? Are they doing any capacity addition? Or what will be the CapEx required in SMG?
So I think -- as we have been answering that question every now and then whenever we do an expansion. At the moment, we've talked about 1 million expansion at Kharkhoda, which where we have talked about the CapEx that we'll be incurring over the 3 phases of the project. Because it will be done over -- in fact, 4 phases of the project. So there will be 4 plants, which will be set up there.
Subsequent to that, we will be adding one more 1 million capacity. That is under discussion now in terms of location in terms of where we do those -- but there's a cost structure team which is studying that. And once all that's finalized, then we will come out with what the plan is and what the CapEx, approximate CapEx, would be on that. At the moment, we have clarity on the 1 million in third quarter, not the other 1 million because that is under study at the moment.
Sorry, sir. My question was what would be CapEx requirement at SMG for the Gujarat plant?
See, I am talking of everything included. So the 1 million additional includes the SMG because SMG, in case the current thing is approved, will become part of MSIL. So it will all come under one bucket.
Got it, got it. And sir, lastly, what was the royalty rate for the quarter?
3.8%.
The next question is from the line of Chandramouli Muthiah from Goldman Sachs.
My first question is on the product launch side. So we have had quite a lot of success in the recent past, 3 big launches. Between now and when the EV launches in 2025, could you talk about if there are more sort of SUV products in the pipeline? Or are we looking to consolidate the recently launched 3 products?
I thought you'll be very happy about the recent launches and look at the volumes of these -- so future product plans, we don't comment about, as a policy, but yes, you're right. For some time, we have to look at maximizing the volumes from these current launches.
Got it, got it. That's helpful. My second question is on the Invicto launch. Just related to the Hycross and if we were to compare to similar situation on the Grand Vitara I think on the Grand Vitara, on the top-end variance, we had chosen to price a little higher than the Toyota Hyryder, but on the Hycross we've been able to put together a value offering, which is priced little more competitively than the top-end sort of Hycross model. So just trying to understand what were the things that went into that decision and how we were able to price more competitively than the Hycross in spite of manufacturing still being outsourced to Toyota.
See, pricing is a market -- it's a competitive market decision, so -- and it keeps varying. We keep calibrating offers with respect to the market and competition and, of course, consumer expectations. So in the Grand Vitara, I think our market pricing is almost now very competitive its -- or I mean, it's almost very close to that of Toyota, so there is no disadvantage as such. And as far as the hybrid variants are concerned, I think the volume will really go up if there are some commensurate benefits on CO2 from the government also in terms of GST.
The next question is from the line of Binay from Morgan Stanley.
Just one clarification. So TDSG will also not be under this entity, right? So that will also remain independent facility investments in that JV?
Yes, yes. TDSG is a separate...
TDSG is a JV of Suzuki, Denso and Toshiba...
Right, so those investments are also directly under Suzuki Japan, right?
Yes. I mean Suzuki has 50% equity in that.
Right, right. And then secondly, actually 2 questions. One is if you could give us the breakdown of the order book across some of your key models. And secondly, like the small cars slowdown is very pronounced, very visible in your numbers. And there's always this debate about whether this is a structural slowdown or if this is cyclical slowdown. You have the most amount of customer insight and data, so anything you could share on that side as to how do you see that market? And when do you see, if any, sort of signs of that market recovering?
Or like, in fact, even in your order books, where are the customers coming from? Are they your own customers? Or they are new customers from other brands moving in. So any insight on that small cars slowdown debate?
Okay, first question, about pending orders. So Brezza is about 48,000, Grand Vitara 27,000, Jimny 23,000, FRONX 23,000, Invicto 8,000 and Ertiga 93,000.
And your second question was on small cars. See, small cars are a very large segment. Last year, they were at 33% of industry; this year, quarter 1, 32%. So -- and last year, against an overall market growth of 26%, hatches grew by 16%, which is positive growth. It is not as much as the rest of industry, but it is still quite significant. Even this year, Q1 -- on Q1, the small car grew marginally. So it is positive growth, but less than of the other segments. We think it's a very important segment. Yes, it is temporarily challenged. The growth is not as much, but we hope that, in times to come, it will also grow. And it's such a large segment that it cannot be ignored.
But in a way, do you see the share of small car in the overall mix continuing to reduce?
Gradually, yes. But for example, last year, it was 33%. This time, it is 32%, but it's still a major chunk.
So in terms of your [ strategy rear view ] then, is it fair to assume that, when you think about 4 million capacity or the future model lineup of Maruti, you are also aligning the company more in terms of a growing segments which is higher-ASP models, SUVs.
See, as a market leader, we have to cover all segments and maximize our volumes. And so we will look at all segments, including the growth segments obviously. And so to that extent, we will cover all segments.
And lastly, just if you have the first-time buyer data, which is always very insightful to look at how that trend is, any insight on the first-time buyer number?
It's about 40%.
So it's actually coming down now, in that sense. It used to be...
Marginally, yes, from about 43% -- between 42% to 44%. From that level, it has come to 40%, yes, slightly come down.
The next question is from the line of Kumar Rakesh from BNP Paribas.
My first question was on the CapEx plans at the SMG. So my understanding is that Suzuki was planning to invest in the SMG plant for EV manufacturing line. So now would that be happening through Maruti Suzuki? And what would be the annual maintenance CapEx of the plant?
So the manufacturing facility at SMG is proceeding, and we hope to launch the EV in the next financial year. And as -- we have not directly gone into the CapEx of SMG, but as mentioned in the press conference, the -- we already have 3 plants there and there is not much more land space available to accommodate more plants.
My second question was on Invicto. It's a very interesting product from Maruti's portfolio perspective because it dramatically changes the profile of the models which we sell. It's more than twice the price of most of the models, which we have in the showroom. And it would be a completely different experience handling this model for your channel as well. So how the experience, so far, has been. The requirement on working capital would have stretched a lot. The kind of customers who would be coming and their expectation from the showroom would be very different, so what has been the learning, so far? And are there any tangible insights you are drawing that can help you premiumize rest of your portfolio?
Interesting question. We would also be very interested in knowing that consumer experience, feedback, learning. Maybe slightly too early to assess, but yes, actually we have a lot of waitlist also. So we'll keep studying as we go along, but yes, we find good acceptance of Maruti Suzuki brand in that consumer segment.
Yes, I agree, Rahul. It may be a little early, but would be really looking forward to hearing your thoughts how that is helping us build more understanding of customers. Because I understand in the rest of the portfolio of the market we already have a very deep understanding of customers. If the above INR 15 lakh and higher is where this could possibly help us, then how -- what are the learnings we are drawing?
So NEXA has helped us to a good extent. In fact, in hindsight, we are happy we launched NEXA. And so apart from the product, the buying experience is also -- it also complements the stature of the customers in that segment. So far, positive. Let's go along the line and gain more into it.
The next question is from the line of Pramod Amthe from InCred Capital.
So this with regard to a similar line. So with regard to your Jimny, what is the customer profile now you have started delivering the vehicles? Is it first-time Maruti buyer? Or these are like upgrades of the erstwhile Maruti guys who are coming in. One -- second, the age profile. What do you see? And considering the long wait, do -- have you seen any cancellations for the same?
Okay. The Jimny is -- as we had defined, it has purity of function. It's a true off-roader, so we had targeted at lifestyle -- kind of the lifestyle customer, who likes that adventure lifestyle, but we also knew that many urban drivers would take a liking to the Jimny because of its prowess and the proportions and the sheer appeal. So till now the deliveries have not been much, but yes, we've got some positive response. We have about 23,000 units of pending orders. And this also, we will keep studying. Incidentally the Jimny is exported also. Even in the export markets, there's a huge pull for it. Actually it started with exports.
But anything on the buyer profile? Is your -- are they are erstwhile Maruti or you're addressing new customers?
It is like too smaller sample size to comment as of now. And I may also caution you that early adopters and the mainstream buyers can be different. The profile can be different.
And second one is coming to SMC. So if I look at the balance sheet, since you had already indicated at the time of agreement that it will be almost 0 PAT company -- so it looks like everything is predominantly like capacity spend, so is it going to be -- if I'm understanding right, when you buy it back, it is whatever has been spent to set up the capacity. That is what broadly you will be paying because it's nothing in the results which you're sitting at. Is that the clear understanding?
It is very natural, Pramod, that the net book value -- in a concept of no profit, no loss can be the -- nothing else, but the value of the assets that have been procured and minus the depreciation that has been incurred, so far. So that's how we arrive at the net book value. There is no reserves in the books.
And sir, related to the same. The only challenge is in terms of timing it, in the sense you are embarking on a large CapEx now on your own and you are also trying to buy out. Looking at the cash sitting on the books, it looks like you can -- you have both the options of buying out cash or, if required, stocks, but would it be advisable to go for the equity swap [indiscernible]? Because looking at your aggressive CapEx plan for the next 7, 8 years. Any thoughts on the same?
So as we said, that the Board will consider the mode of acquisition. And that's not been decided yet. So they will be meeting another round soon. So once that's decided, then we'll exactly know what is the mode?
And this will also go through the majority of the minority voting. Or how does it...
Yes, it will go through all the regulatory approvals that are required, including the minority shareholders' approval.
We have the next question from the line of Joseph George from IIFL.
The first question that I had was could you give us the retail sales number for the quarter and how it looks compared to 1Q of FY '23?
Retail sale was approximately INR 3.8 lakhs in the quarter.
Okay. And how was it year-on-year?
Year-on-year was -- it's a growth of about 8%.
Got it. And the second question was you've mentioned a dealer inventory of 1 lakh -- sorry, an inventory of 1,25,000. Just to confirm it's dealer inventory at the end of 1Q.
Yes, that's right. It's dealer inventory.
Yes.
And the last question that I had was when I look at the order book. At the end of 4Q, you had mentioned that it's about 412,000. Now it's come down to 355,000. And if I do the simple math, it is that wholesales in the quarter were about 422,000. I get a net new order flow of about 365,000, which is -- in that number understated because of a lot of cancellations? Or is that a right-about number in terms of new order flow for the quarter?
Sorry. We didn't get your question.
So see, at the end of 4Q, we had an order book of 412,000. That's the number that you had given out on the 4Q call. And at the end of 1Q, you mentioned that you have an order book of 355,000 which is a reduction of about 55,000, 60,000. The wholesales in the quarter was about 420,000 and excluding Toyota supplies, and excluding exports, which means that the new order flow in the quarter would have been about 360,000, 365,000. Is that the right number? Or was there a lot of cancellations from the opening book, because of which, the number looks understated?
Just keep in mind that the Jimny and the FRONX are new models. So their bookings would also go up. And of course, the network stock has also improved a bit. Earlier, it was too low. Now we are at 4 weeks approximately.
The next question is from the line of Jay Kale from Elara Capital.
Just one clarification on your CapEx side. So earlier, without SMG, you had guided around INR 7,000-odd crore CapEx. Now with SMG coming in your fold, how should one think about your CapEx plans over the next couple of years? Is it right to assume that your earlier CapEx had increased at Maruti level because your incremental CapEx was more happening at the Maruti level and not at the SMG level any which way? So your CapEx for the entire entity including SMG should not be too different than the INR 7,000 crore for the next 2, 3 years?
Let me simplify it for you. We have already said that the next 1 million capacity will be done at Kharkhoda for which we have already announced the CapEx plan, right, in phase 1. And it will be done over in 4 phases. So that's clear. So 1 million capacity, anyway, is not coming up in third quarter. We've also said additional 1 million capacity for -- which is under study. That 1 million capacity, where it will be done and what will be the CapEx would be decided once we are clear on the plans for the additional 1 million capacity.
Of course, if the -- if we get requisite approvals for acquiring the shares of SMG and then becoming part of MSIL, then whatever is the future CapEx, that of course will be incurred by MSIL. Now once we have clarity on the second 1 million, we will get -- we'll let you know in terms of what the additional CapEx will be. At the moment, we have clarity on Kharkhoda for the first phase, which we have already announced last time, but additional CapEx over the next 5, 6, 7 years that will be incurred, we will give you more clarity as and when we get the location identified and the amounts which -- [ for that ] identified.
Understood, understood. And just one on the PLI. I think SMG had won the PLI, so that would get -- naturally get transferred to Maruti. That specific entity would have won PLI. Or how would that happen?
Even in our earlier PLI application, we had mentioned that the production will be at SMG and the sale will be by MSIL, so kindly consider it as one application. And that doesn't change. I mean, in fact, it gets even more -- even simpler now.
Thank you. Ladies and gentlemen, that was our last question for today, and with this, we conclude today's conference call. On behalf of Maruti Suzuki India Limited, we thank you for joining us. And you may now disconnect your lines.