Kotak Institutional Equities downgraded Maruti Suzuki India to "sell" from "reduce," saying the outlook for the company will be more challenging than currently priced by the stock.
Kotak notes Maruti Suzuki shares are factoring in expectations for a "sharp recovery" in volumes in fiscal year 2015 but says the year could instead be challenging because of "high inflation and weak job market conditions."
"We are also concerned on low capacity utilization levels of the industry and strong competitor launches, which will restrict operating margin improvement," Kotak adds.
Kotak is only one of five brokerages out of 54 tracked by Thomson Reuters to rate Maruti Suzuki at "reduce", "underweight", or "sell."
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