INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of Maruti Suzuki on Friday restricted losses after falling nearly 4 per cent on Thursday amid disappointing first quarter
results.
Brokerages noted that while the auto maker's Q1FY19 revenues came on expected lines, its Ebitda was less-than-expected
Due to lower other income and higher tax, its profit missed Street estimates
That said, the company reported a healthy 24 per cent volume growth and pushed its market share to 52.5 per cent during the quarter, they
said.
On Friday, the stock fell 0.86 per cent to hit a low of Rs 9,315 on BSE after falling 4 per cent in the previous session
At this price, the stock was roughly trading at 28 times its projected one-year forward earnings, a premium of 28 per cent over the
five-year average.
The automaker on Thursday reported 26.91 per cent year-on-year rise in net profit at Rs 1,975.30 crore for the quarter
It had posted a net profit of Rs 1,556.40 crore in the corresponding quarter last year.
"Rising commodity prices and a slight increase in
discount, in the absence of a price increase, weighed on margins, even though a favourable product mix and lower advertising spends helped
offset the impact to some extent," JM FInancial said.
"Continued network expansion and multiple new model launches in the pipeline make us
immediate trigger for upgrading the earnings estimates, could deter investors from making significant additions to the best consumer
discretionary play in India, analysts told ET
Any fall should give a buying opportunity to investors, they added.
Brokerage Kotak Securities expects volume growth to remain high
supported by new products and facelifts to support volume growth
The company highlighted that impact of adverse forex mix will play out in the coming quarters
Over the medium to long term, we expect MSIL to witness gradual improvement in margins," Kotak said.
Foreign brokerages Nomura India, Citi
and Goldman Sachs have maintained buy rating on the stock with targets of 10,763, Rs 10,700 and Rs 11,041, respectively
Macquarie has an outperform rating on the scrip with a target of Rs 11,500.
