CLSA slashes target price for Maruti Suzuki amid weak demand

Global brokerage firm CLSA slashed the target price of Maruti Suzuki citing weak demand. While maintaining a ‘Buy’ call on Maruti Suzuki, CLSA cut the target price to Rs 7,200 (from Rs 7,400 earlier). It also cut FY20-21 EPS by 8-10 per cent on lower volumes.

The scrip was trading almost flat at Rs 5971.55 in the early trade, while the benchmark BSE Sensex was up 245 points, or 0.66 per cent, at 37,595 at around 10.10 am (IST).

CLSA also added that Maruti Suzuki is the best way to play the Indian auto recovery.


“Despite the weak demand passenger vehicles are better placed for recovery. Demand recovery should lift margins,” it said.

Over 3,000 temporary employees have lost jobs with the country’s largest carmaker Maruti Suzuki India (MSI) due to the ongoing slump in the automobile industry, according to PTI.

MSI Chairman RC Bhargava said contracts of the temporary workers were not renewed due to the slowdown while asserting that permanent workers have not been impacted.

Earlier, the company also cut its production in July by 25.15 per cent, making it the sixth month in a row that company reduced its output. It produced a total of 1,33,625 units in July, compared with 1,78,533 units in the year-ago month, Maruti Suzuki India (MSI) said in a BSE filing.