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E-mail ID will not be published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

  • Mutual fund stakeholders should focus on better returns in a bullish market

    The association of mutual fund of India (AMFI) has recently capped the commission paid to distributors of mutual fund schemes to a maximum of 1 per ce

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Today's Columns

Roopen Roy

What we can learn from Singapore

Lee Kuan Yew passed away at the age of 91 ...

Rajgopal Nidamboor

Don’t depend too much on ‘heroes’

We all have our own set of ‘heroes’ — not ...

Shona Adhikari

Anjolie Ela Menon, the storyteller, is back

Anjolie Ela Menon, one of India’s most celebrated artists, is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture