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Elara Capital maintains accumulate on Maruti Suzuki, target price Rs 8,000

Third quarter margin was affected predominantly due to higher discounts and inventory movement, both of which are likely to be tailwinds in the fourth quarter, said Elara.

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Last Updated: Jan 30, 2020, 08.50 AM IST
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Elara Capital has maintained accumulate rating on Maruti Suzuki India in the long term with a target price of Rs 8,000. The stock ended up 0.2% at Rs 7,011.90 on Wednesday while the BSE Sensex closed 231.80 points up (+0.57%) to 41,198.66.

Company Financials

For the quarter ended 31-12-2019, the company has reported consolidated sales of Rs 19655.50 crore, up 21.91 % from last quarter sales of Rs 16123.20 crore and up 3.83 % from last year same quarter sales of Rs 18930.70 crore. The company has reported net profit after tax of Rs 1568.70 Crore in latest quarter.

The company’s top management includes Mr.D S Brar, Mr.Hiroshi Sakamoto, Mr.Hisashi Takeuchi, Mr.K Ayukawa, Mr.K Saito, Mr.O Suzuki, Mr.R C Bhargava, Mr.R P Singh, Mr.T Suzuki, Mr.Takahiko Hashimoto, Ms.P Shroff, Ms.Pallavi Shroff, Ms.R S Karnad. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2019, the company has a total of 302,080,060 shares outstanding.

Investment Rationale

Third quarter margin was affected predominantly due to higher discounts and inventory movement, both of which are likely to be tailwinds in the fourth quarter, said Elara. Expectations of rural demand bouncing back, owing to good rabi sowing, would aid Maruti Suzuki. FY20 has been one of the strongest years in terms of new model launch impact from competition and the same is expected to subside over FY21-22, said Elara.

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