Brokerages reduced forecast income for Maruti
Brokerages reduced forecast:
Weak performance for Maruti Suzuki in the March quarter led to a reduction of next fiscal year revenue estimates of up to 40%. Several brokerages have reduced the stock to ‘sell,’ thereby showing a stock downside of up to 33%.
Some who expect the greatest carmaker in the second half of the next fiscal year or FY22 to come back strongly have projections of up to Rs 5,700.
In the view of the decline of 17% of volume in next fiscal year, Maruti will return to volume levels as soon as seen in FY11, ICICI Securities decreased stock to ‘sell‘ with the target of Rs 3,381.
“To the decadal growth-low-penetration Bull hypothesis this indicates a lost decade.” It said. In the quarter of March, the company sold a domestic sales of 3.60 lakh vehicles down 16% Year-on-Year.
With the modification target of Rs 4,300 from Rs 4,900 previously, Kotak Institutional Equities maintained its “sell” order. The scrip is almost 35% less than 52-week high.
The auto scrip trading flat with Rs 5,048 on May 14th.
“Maruti ‘s result from the March quarter is simply a reflection of March’s 10 days of lockdown and H1FY21’s worst one yet,” Motilal Oswal Securities said.
The COVID 19 pain will lead to a weak FY21, according to the brokerage. However, Maruti predicts to recover more quickly than peers. “There is a substantial recovery in volume in H2FY21 to stock results,” Motilal Oswal Securities said. The target of this brokerage is Rs 5,850.
On May 13th, Maruti Suzuki fell by Rs 1.291.70 crore, which was hit by a lower sales volume and higher sales promotion costs, by 28% year to year.
Edelweiss Securities said the recovery would likely be steady and protracted this time. “The portfolio of good and fresh items is highly salient. A good franchise would help MSIL to gain market share, but it may be at the cost of margins, ” it said.
For the quarter, the gross margin rose sequentially at 30.4%, adjusted for a stock Rs 125 of BSIV, to 130 basis sequentially. Phillip Capital has a stock target of Rs 6,000. But for Maruti, the brokerage remained largely unchanged in their FY 21 estimates.
“In the structural theme, we consider the Covid-19 disruption to be a temporary blip. Given Maruti’s role as the market leader and the prospects for strong growth after FY21, Maruti’s target of Rs 6,000 is 25 times FY22 EPS, “it said.
May 14th Stock Market Update Sensex and Nifty
On the fourth day of the week, the stock market trading with the bearish trend. The Sensex traded with a loss of 817.87 points reached a 31,190.74 level with 2.56% down. Whereas, Nifty traded with a loss of 231.45 points reached 9,152.10 level with 2.47% down.
In the border market, the S&P BSE Midcap traded with a loss of 55.58 points reached 11,526.14 level with 0.48% down. Whereas, S&P BSE SmallCap traded with a loss of 78.55 points reached 10,695.88 level with 0.73% down. At the same time, Nifty bank traded with a loss of 514.20 points reached 19,120.75 with 2.62% down.
Top Gaining Stocks: Bajaj Finance, Britannia Industries, Nestle India, Sun Pharmaceutical Industries, and Bajaj Finserv Ltd.
Top Losing Stocks: NTPC, Hindalco Industries, Infosys, Power Grid Corporation of India, and GAIL (India) Limited.