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Buy Maruti Suzuki India; Target Of Rs 8000: Sharekhan

Sharekhan is bullish on Maruti Suzuki India has recommended buy rating on the stock with a target price of Rs 8000 in its research report dated October 29, 2020.

Nov 2, 2020 / 03:07 PM IST
 
 
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Sharekhan's research repor on Maruti Suzuki India


Maruti Suzuki’s (Maruti) Q2FY2021 results missed estimates, driven by lower-than-expected margins. Increased commodity prices and unfavourable INR/JPY movement impacted margins. Festive outlook is strong with the company posting strong double-digit growth in deliveries and bookings in Navratra-Dusherra season. We expect strong recovery from FY22 driven by normalisation of economic activity. Operating leverage, cost-control measures, and lower discounting would drive margin improvement going ahead; expect margins to reach historical levels of 12-13% in FY23. P/E of 24.7x FY23 earnings is close to historical average but given early recovery cycle, multiples can expand above averages.



Outlook


We retain Buy rating on the stock with an unchanged PT of Rs. 8,000.


For all recommendations report, click here


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Broker Research
first published: Nov 2, 2020 03:07 pm

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