Brokerages hold mixed views on Maruti after its tepid Q1 show
Antique, Investec and Kotak Institutional Equities have maintained a sell rating while Nomura and Centrum have a neutral and reduce rating respectively, on the stock. HDFC Securities, Motilal Oswal, Emkay and Jefferies have buy ratings on the stoc...
By ET Bureau | Updated:
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“Valuation at 33 times FY23 estimated EPS versus five-year average of 27 times is not comforting, especially when there is no visibility on the reversal of market share loss,” said Investec.
Mumbai: Brokerages have a mixed view on Maruti Suzuki India as its June quarter earnings belied market expectations.
Antique, Investec and Kotak Institutional Equities have maintained a sell rating while Nomura and Centrum have a neutral and reduce rating respectively, on the stock. HDFC Securities, Motilal Oswal, Emkay and Jefferies have buy ratings on the stock. Some brokerages have increased target price due to rolling forward of valuations.
The auto maker reported a net profit of ₹440.8 crore for the June quarter compared to a loss of ₹249.4 crore during the same quarter last year.
The company said its profit in the June quarter was impacted due to lower sales volumes. Shares of Maruti Suzuki India ended down 2.2% at ₹6,991.90.
Kotak Institutional Equities said it remains concerned about market share loss in the sports utility vehicle segment, raw material headwinds and expensive valuation.
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Investec said a normalising demand environment post Covid-19 could be further detrimental to Maruti Suzuki’s market share as the benefit of stronger rural growth and wider presence in the entry segment fades with urban recovery.
“Valuation at 33 times FY23 estimated EPS versus five-year average of 27 times is not comforting, especially when there is no visibility on the reversal of market share loss,” said Investec.
