For Suzuki, this transaction appears somewhat neutral for the parent from an earnings perspective. On the flip side, this transaction could result in lower RoCE for the combined entity as the facility is extremely capex intensive, creates the possibility for incremental capex in SPIL that will have to be fully borne by MSIL – though this is ruled out for the short term as the incremental 300k diesel engine capacity will be in MSIL?s Gurgaon plant. Our target price for Maruti is R1,654. We value the parent business at R1,615 based on 11.5x Sep13e cash earnings (CEPS = PAT + depreciation). At 11.5x we value the parent business at a ~8% premium to its long term historical average – justifiable, given that MSIL will be in the early cycle over much of FY13. We value MSIL's subsidiaries at R39/share, based on 12x Sep13E EPS. We estimate cash earnings CAGR of ~32% over FY12-FY14E. Moreover, MSIL's depreciation policy is per IFRS standards, and is thus more aggressive than those of peers.