Ajay Shethiya, Centrum Broking and Pritesh Mehta of IIFL in an interview with Sonia Shenoy and Anuj Singhal on CNBC-TV18 gave their reactions on Maruti Suzuki's third quarter numbers and expectation of the stock performance going forward.
India's largest car manufacturer Maruti Suzuki (MSIL) surpassed street expectations with the third quarter net profit rising 36 percent year-on-year, driven by strong operational performance, higher localisation and favourable forex. Quarter-on-quarter growth was 1.6 percent. The market share of the company increased 2.5 percent to 42.8 percent in the quarter gone by.
Post Q3 performance
According to Ajay Shethiya the numbers missed their estimates but seemed to have beaten street expecations. On the PAT front the number came in lower at Rs 681 crore versus expectation of Rs 721 crore.
Moreover, the cost cutting measure helped the company maintain EBITDA margins at 12.4 percent, which is very positive given the fact that the company faced currency headwinds along with dip in volumes, said Shethiya.
Market Share
With the launch of Celerio, their compact SUV and with the new SX4, market share for the compny is likely to go up. "All in all, a positive set of numbers and definitely the ability to defend the market share is a testimony to their product portfolio in the market.," said Shethiya
Stock outlook
However, Pritesh Mehta of IIFL has a avoid on the stock right now. "The stock is very close to its 200 day moving average (DMA), if you look at the weekly chart, it is trading very close to the lower end of the rising channel. I think we should be avoiding this stock right now" said Mehta.
"Higher localisation, favourable foreign exchange and cost reduction initiatives by the company contributed significantly to net profit," RC Bhargava, chairman said.
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