HSBC maintains hold on Maruti Suzuki India, target price Rs 7,200

HSBC has maintained hold rating on Maruti Suzuki India in the long term with a target price of Rs 7,200. The stock India ended up 1.4% at Rs 6,700.15 on Friday while the BSE Sensex closed 246.68 points up at 38,127.08.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 18738.80 crore, down -9.65% from last quarter sales of Rs 20740.70 crore and down -14.10% from last year same quarter sales of Rs 21813.80 crore. The company has reported net profit after tax of Rs 1363.40 crore in latest quarter.


Investment Rationale

Passenger vehicle industry continues to struggle as potential buyers see weaker income/ wage growth and changed spending priorities, the brokerage said. Cars like S-Presso are good to maintain market share, but focus for Maruti should now be on Rs 10 lakh-plus cars, otherwise it runs the risk of going back in time and branded as a first-time buyer car OEM, said HSBC.