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MTECHTIPS:-Brokerages remain bullish on Maruti Suzuki post Q2 results
Most brokerages have maintained bullish view on Maruti SuzukiBSE 2.54 % after its second quarter results turned out to be above street estimates. The stock, which is owned by big fund houses, has extended gains for second straight session on increased volume activity. The auto major reported a net profit of Rs 227 crore for the quarter ended September, down 5.4 per cent, against a net profit of Rs 240 crore in the corresponding quarter last fiscal. ET Now poll expected the net profit at Rs 180 crore for the quarter. Jefferies has raised its target price by 11 per cent onMaruti SuzukiBSE 2.54 % and maintained 'Buy' rating on it. "Maruti's second quarter results beat our muted expectations by a wide margin, largely on account of cost control. The outlook for the remainder of the year seems positive with continued strength in Maruti's diesel portfolio, improving demand for petrol cars, and improving pricing," the brokerage said. According to EdelweissBSE 0.14 %, the last five quarters for the company have been very challenging due to production disruptions and higher input costs. "We expect margins to improve in coming quarters and normalize at over 9.5 per cent in FY14 due to superior product mix, lower discounts and other cost reduction measures taken by the company," the brokerage said. The brokerage is of the view that despite the near term headwinds, restoration of production at peak levels, falling interest rates as well in commodity prices augur well for Maruti Suzuki's long term demand and profitability outlook. "We maintain our 'BUY' rating on the stock with a revised target price of Rs 1,595, implying 16x FY14E core EPS of Rs 87 plus, and a discounted NPV of cash/share of Rs 209. Adverse currency movement remains a key downside risk," it added.
Most brokerages have maintained bullish view on Maruti SuzukiBSE 2.54 % after its second quarter results turned out to be above street estimates. The stock, which is owned by big fund houses, has extended gains for second straight session on increased volume activity. The auto major reported a net profit of Rs 227 crore for the quarter ended September, down 5.4 per cent, against a net profit of Rs 240 crore in the corresponding quarter last fiscal. ET Now poll expected the net profit at Rs 180 crore for the quarter. Jefferies has raised its target price by 11 per cent onMaruti SuzukiBSE 2.54 % and maintained 'Buy' rating on it. "Maruti's second quarter results beat our muted expectations by a wide margin, largely on account of cost control. The outlook for the remainder of the year seems positive with continued strength in Maruti's diesel portfolio, improving demand for petrol cars, and improving pricing," the brokerage said. According to EdelweissBSE 0.14 %, the last five quarters for the company have been very challenging due to production disruptions and higher input costs. "We expect margins to improve in coming quarters and normalize at over 9.5 per cent in FY14 due to superior product mix, lower discounts and other cost reduction measures taken by the company," the brokerage said. The brokerage is of the view that despite the near term headwinds, restoration of production at peak levels, falling interest rates as well in commodity prices augur well for Maruti Suzuki's long term demand and profitability outlook. "We maintain our 'BUY' rating on the stock with a revised target price of Rs 1,595, implying 16x FY14E core EPS of Rs 87 plus, and a discounted NPV of cash/share of Rs 209. Adverse currency movement remains a key downside risk," it added.
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