Dec 28, 2012, 03.41 PM IST | Source: CNBC-TV18

Sell Maruti Suzuki: Mahantesh Sabarad

Mahantesh Sabarad, Fortune Equity Brokers is of the view that Maruti Suzuki looks quite expensive, one can sell the stock.

Mahantesh Sabarad, Fortune Equity Brokers is of the view that Maruti Suzuki looks quite expensive, one can sell the stock.

Sabarad  told CNBC-TV18, “I do not hold the view that Maruti Suzuki will grow in low single digits in terms of volumes for FY14. Having grown by just about 3-5 percent in this fiscal year by the time we end FY13, they have a potential to actually grow over the low base. Arithmetic tells us that they can possibly grow at close 20 percent in terms of volume growth. So I am a little surprised with what Maruti is trying to convey by saying that the volume growth in FY14 is going to be quite low. So I am actually surprised by this kind of guidance that is coming out."

He further added, "But if you look at the stock we clearly have a sell call on the company more to do with its poor financial performance. They are stuck in a low EBITDA margin trap. They are delivering low returns on their balance sheet, so that makes the stock quite expensive currently.”

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