JP Morgan downgrades Maruti Suzuki to "underweight" from "neutral" and cut its target price to Rs 1,510 rupees from Rs 1,750, citing muted passenger car demand in India and increasing competition in higher value segments.
"We believe the current FY12-14E downturn in the Indian automobile industry is similar to the '01-02-03 slowdown, when passenger car sales growth was weak for three years (vs trend growth of 12-14 percent)," J.P. Morgan said in a report on Monday.
Maruti Suzuki , the country's biggest carmaker by sales, shut production at both of its plants earlier this month to adjust inventory levels in response to falling sales.
Company's vehicle sales for May 2013 also declined by 14.4 percent on a yearly basis.
Share in Maruti down 0.5 percent at 12.37 pm
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