Accumulate Maruti Suzuki; target of Rs 1170: PLilladher

47464 Investors following Maruti Suzuki. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate Maruti Suzuki; target of Rs 1170: PLilladher

Prabhudas Lilladher is bullish on Maruti Suzuki and has recommended accumulate rating on the stock with a target of Rs 1170 in its January 18, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Accumulate Balrampur Chini; target of Rs 46: SKP Securities Buy TCS; target of Rs 1426: Dolat Capital Buy Gujarat Fluoro; target of Rs 468: Firstcall Research ALSO READ See previous views by Prabhudas Lilladher See what other Experts & Brokerages are saying about Maruti Suzuki See messages about Maruti Suzuki Maruti Suzuki BSE | NSE 30/05/12 Are Mutual Funds betting on Maruti Suzuki?

Prabhudas Lilladher is bullish on Maruti Suzuki and has recommended accumulate rating on the stock with a target of Rs 1170 in its January 18, 2012 research report.

Our positive stance on MSIL, leading to an upgrade from 'Reduce' to 'Accumulate' on September 8, 2011 by us and reiterated in our Top Picks presentation released on December 9, 2011, was mainly driven by the following key arguments:

• Double-digit volume growth at 15%+ in FY13E, driven by diesel engine capacity expansion to 24K/month by January 2012 from 20K/month, resumption of operations at Manesar and the new 'Swift' garnering over 1 lac bookings.
• MSIL getting RBI approval to hedge its vendor imports (Yen-denominated indirect imports account for ~12% of Net Sales), starting Q4FY12E, which we had communicated to our clients.
• Valuations attractive after the stock had corrected 30%+ (till September 2011) in the last one year; thereby, risk-reward turning favourable.

"MSIL has also taken a price increase to the extent of 0.3-3.4% on vehicles across the board on account of commodity cost pressures. The price hike has been in the range of Rs2,400- 17,000 across models, except the 'Swift Dzire', effective from January 16, 2012. The stock has given 19.0% absolute returns in the last one month. With Q3FY12E profit likely to be lower by 60%+ YoY and a recent run-up in the stock price, we advise caution to the investors, as absolute upside from hereon is capped at ~6%. Any disappointment in the quarterly result, would lead to correction In the stock price, which could provide an entry point to long-term investors. Hence, one can accumulate the stock post Q3FY12E results scheduled on January 23, 2012."

"We expect a volume growth of 15%+ in FY13E, driven by strong order backlog for the new 'Swift' and augmentation of diesel capacity by 20%. At the CMP, the stock is trading at 14.2x FY13E EPS, which in our view is attractive, given the 40%+ growth in PAT in FY13E (albeit from a lower base). We reiterate our 'Accumulate' rating on the stock," says Prabhudas Lilladher research report.

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment