Will be cautious on Maruti stock in the near term: Nitin Raheja, AQF Advisors

In a chat with ET Now, Nitin Raheja, CIO, AQF Advisors, shares his recommendation on Maruti. Excerpts:

ET Now: How much more damage do you foresee for Maruti as well as the stock price now?

Nitin Raheja: The sentiment is going to be negatively impacted. Nobody is really convinced about the reason why they are performing this way especially considering that they are sitting on so much cash.

Maruti has been having labour issues at its plant and it is restricted in terms of its options due to various stakeholders. So, I suppose it really wants a kind of leverage that if any issues come up, it would deal the way it wants to by owning 100%. I can only attribute that reason.

ET Now: Are you of the view that eventually when the contract would be sealed, the transfer pricing will be in favour of Maruti Suzuki?

Nitin Raheja: Unless and until there is transparency on these issues, there is always going to be a question mark over something like this. In fact it only complicates things. In the short term, till there is more clarity, I would be a slightly wary of the stock.