Maruti Suzuki can move to Rs 1700: Dilip Bhat

Maruti Suzuki can move to Rs 1700 over next 8-10 months, says Dilip Bhat, Joint MD, Prabhudas Lilladher.

Bhat told CNBC-TV18, “Maruti Suzuki numbers has been ahead of the street expectations both in terms of EBITDA. I think EBITDA has been up by almost 0.5 percent more than what the street was expecting. Rather we were expecting about 7.5 percent, it has come out to 8 percent and so the net profit too is a tad higher than our expectations at Rs 500 crore, we were expecting about Rs 470 crore.”
He further added, “Going forward in Q4 what possibly may happen is that the volume numbers probably will show a 7-8 percent lower growth and we probably are expecting that in Q4 they will end up with something like Rs 700 crore. So, on an overall basis Maruti is trading at something like 15 times, if I were to take a Rs 107 earnings which is what we are expecting for FY14. So, it is not cheap but if one were to stretch a year beyond that maybe we can still see a price of around Rs 1700 over next 8-10 months.”
"Maruti Suzuki is one stock to play a little more also on the defensive side. It should be a part of the core portfolio and considering the fact that the next one year is going to be much better than what we saw in this year and I would really extend my horizon to say may be FY15 also. Taking that into account Maruti I would buy, both as a defensive and a slightly better returns to expect from."