Maruti Suzuki rebounds; selloff seen overdone

Maruti Suzuki shares gain as much as 8 percent, recovering almost fully from an 8.2 percent drop on Tuesday due to concerns about Suzuki Motor's plans to invest $488 million to build a car plant in India's Gujarat state.

Investors worried as the plant would be wholly owned by Suzuki and would sell cars to Maruti Suzuki at a price that will include production costs plus enough cash to cover further capital expenditure requirements.

Brokerage Jefferies kept its "hold" rating on the stock, calling details of the arrangement unclear but noting that the downside was limited.

"We are unable to reconcile our calculation with management's contention that there will be no hit to Maruti's margins," Jefferies said in the report.

Macquarie upgraded the stock to "outperform" from "neutral", citing December-quarter earnings beating estimates and an exaggerated fall in the share price on Tuesday.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • By standing up for its priorities at WTO, India has saved its farmers

    Narendra Modi has demonstrated his global priorities during his short stint in power by engaging Pakistan and China on the need to mend fences with In

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Dealing with a sin called insensitivity

Rage and the notion of being above the law — ...

Purnendu Ghosh

Avoiding utopian or dystopian extremes

One must know the known in order to know the ...

Shona Adhikari

The tormented founding father of modern art

The subject for today’s art column has been triggered by ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture