Brokers' picks: JPMorgan ‘Underweight’ on Maruti

Target: Rs 1145

Current Price: Rs 1350

Despite the challenging demand environment, Maruti is raising prices to defend margins: As per media Maruti Suzuki will likely increase prices (1-2% across products) of its models by as much as Rs 10,000 from the first week of October to offset the impact of the weakening rupee.

The already weak consumer sentiment will be further impacted by the upcoming price hikes.

JPM has reiterated its ‘Underweight’ stance on Maruti, given the challenging demand environment and the rising cost pressures.

Demand trends remain weak: Sales at Maruti have been sedate (+1% YTD), given the slowing economic growth.

JPM expects sales over 2H to remain weak.