Motilal Oswal is bullish on Maruti Suzuki has recommended buy rating on the stock with a target price of Rs 6950 in its research report dated July 27, 2019.
Motilal Oswal's research report on Maruti Suzuki
Net realization increased 7% YoY (+4.6% QoQ) to ~INR489.8k (our estimate: ~INR475k). Net sales were down ~12% YoY (-8% QoQ) to ~INR197.2b (our estimate: ~INR191.3b) due to ~18% YoY volume decline. EBIT margin shrank 5pp YoY (-110bp QoQ) to 5.7% (our estimate: 5.9%) owing to higher depreciation, although the impact of operating deleverage was offset by lower RM cost and favorable FX. Higher other income and lower tax restricted the PAT decline to ~27% YoY to ~INR14.4b (our estimate: ~INR13.8b).
MSIL is likely to recover the fastest once current headwinds recede due to its strong product portfolio, increased localization, reducing FX exposure and capex-light business. Maintain Buy.
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