Maruti Suzuki December sales muted: Should you buy, sell or hold the stock?

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Maruti Suzuki December sales muted: Should you buy, sell or hold the stock?

Maruti Suzuki’s auto sales for December have seen mixed reaction from analysts with Citi maintaining the stock as its top pick in the space. Meanwhile, Deutsche Bank and Motilal Oswal have flagged concerns on volume growth.

The company continued to disappoint the Street with its monthly sales numbers which declined 1.3 percent year-on-year on lower exports.

The country’s largest car maker sold 1.28 lakh units in last month of 2018 against 1.3 lakh units sold in same month last year, which was below the Nomura’s expectations of 1.36 lakh units.

Domestic sales grew 1.8 percent year-on-year to 1.21 lakh units, but exports fell sharply by 36.4 percent to 6,859 units compared to year-ago period.

Here is a gist of what brokerages have said in their review of auto sales.

Brokerage: Deutsche Bank | Rating: Hold | Target: Rs 7,350

The global research firm believes that volume growth was muted in auto sales figures that were reported for December.

Further, it observed that year-to-date domestic growth of 9 percent was in line with its forecast of 9 percent.

However, it has cut FY19-21 EPS forecast by 1-3% and sees risk related to volume performance of new models.

Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 8,760

It said that compact volumes were disappointing, which saw a decline of 4 percent year-on-year. Export volumes are lower than our estimate, analysts at the firm wrote in their report. Further, it also lowered FY19 and FY20 volume growth estimates to 5 and 10 percent.

Brokerage: Citi | Rating: Buy | Target: Rs 9,800

Citi said that the company will continue to gain market share. Any incentives to the rural sector by the government will augur well. It maintains the company as its top pick in the sector.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2019-01-04 13:42:51

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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