Here's why you should still buy Maruti despite price hikes

Ashwin Patil, Research Analyst at LKP Securities believes the price hike announced by Maruti yesterday may not impact the sales significantly because the Rs 20,000 hike could be for the highest model, while other smaller cars could see a hike of only Rs 3,000 to Rs 4000.He has a buy rating on the stock with a target price of Rs 5150.The country's largest carmaker Maruti Suzuki India Thursday said it would hike prices of its vehicles across models by up to Rs 20,000 from January to offset impact of rising costs and weakening of rupee against dollar. Moreover, this price hike has come after a long duration and so may not be a sustainable worry, adding that the company has also given reasons for the price hikes, says Patil.Patil says, the margins for the company will go up, because profitability goes up whenever prices go up. So although there would be a slight impact on volumes, there would be positive impact on margins. Patil is also upbeat on Ashok Leyland with a price target of Rs 105 and Tata Motors with target price of Rs 504 on back of improvement in commercial vehicle segment and pick up in economy and new norms of scrapping trucks older than 15 years. For the entire discussion, watch video