Maruti Suzuki Trades in Red After CLSA Downgrades Rating on Stock

  • by THO
  • 2 months ago
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By Malvika Gurung — Shares of the country’s largest car manufacturer Maruti Suzuki (NS:) India were trading 0.6% lower at Rs 7,281.2/share at 10:35 am on Friday, after declining up to 1.2% in the early trade session today, after the foreign brokerage CLSA downgraded its rating on the company from ‘Underperform’ to ‘Sell’ on Friday.

The brokerage has revised its target price on the stock from Rs 6,550 to Rs 6,420 a share. CLSA has revised its rating based upon the auto major losing market share in the highly profitable SUV segment while continuing to forecast a loss in market share amid a weak model launch pipeline.

The country’s largest car manufacturer has seen a drop in total sales by 9.2% on a YoY basis to 1,39,184 units in November 2021, while rival carmaker Tata Motors (NS:) reported an outstanding sales figure with a surge of 21% YoY to 62,192 units in Nov.

According to the brokerage, MSI could lose a market share of about 600 Bps in the two year period, from FY20 to FY22 in the passenger vehicle segment.

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