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Maruti slides after global brokerage downgrades stock to 'sell', cuts target price

CLSA said if the company loses share in the SUV segment, it may lose 600 Bps market share in the passenger vehicle segment over FY20-22

December 03, 2021 / 02:55 PM IST
Maruti Suzuki India

Maruti Suzuki India

 
 
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Maruti Suzuki's share price was down over a percent in the afternoon trade on December 3 after CLSA downgraded the stock to “sell” from “underperform” and cut the target to Rs 6,420 from Rs 6,550 a share.

The brokerage firm said that if the company loses share in the SUV segment, it may lose 600 Bps market share in the passenger vehicle segment over FY20-22.

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"Our EPS estimates are 20 percent/17 percent below consensus for FY23/24. We continue to forecast market share loss amid a weak model launch pipeline," it said.

The stock was trading at Rs 7,222.35, down Rs 102.65, or 1.40 percent, at 14:26 hours. It touched an intraday high of Rs 7,332.45 and an intraday low of Rs 7,208.50.

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The country’s largest carmaker said its production in December could only be up to 85 percent of the normal, owing to supply constraint of electronic components in the wake of chip shortage.

Due to supply constraints, the company is expecting an adverse impact on vehicle production in December 2021 in both Haryana and Gujarat, owing to a supply constraint of electronic components impacted by shortage of semiconductor devices, Maruti Suzuki India said in a regulatory filing.

"Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 80 percent to 85 percent of normal production,” it said.

The auto company reported total sales of 139,184 units in November 2021, down 9.2 percent YoY. It had reported total sales at 153,223 units in the year-ago period. Domestic passenger vehicle sales came at 109,726 cars against 135,775 units a year ago.

The company exported 21,393 units in November 2021 against 9,004 cars in November 2020.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Dec 3, 2021 02:55 pm

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