CLSA sees the potential for the company to strengthen its India franchise on such launches and said Maruti is the best way to play a potential demand recovery.
Shares of Maruti Suzuki India gained more than 1 % intraday on October 4 after CLSA maintained its buy call on the stock with a target price at Rs 7,950, implying 18 % potential upside from current levels.
"The bringing SUV styling to compact cars should help boost market share as the Indian market still lacks SUV-like products in a lower price range," the global brokerage said.
The better availability of such vehicles should drive a further shift in passenger vehicle demand, it feels.
CLSA sees the potential for the company to strengthen its India franchise on such launches and believes Maruti is the best way to play a potential demand recovery.
In September, the country's largest carmaker launched the S-Presso compact car at Rs 3.69 lakh (ex-showroom). This is the first all-new car brand from Maruti in about 2 years, and it is being launched in the middle of one of the worst slowdowns seen in the Indian car market.
The S-Presso is also the first new model car from Maruti featuring a Bharat Stage VI engine. Because of its high stance, tall seating and boxy looks, Maruti is calling the S-Presso an SUV.
The stock in the last month gained nearly 13 %. It was quoting at Rs 6,810, up to Rs 57.75, or 0.86 % on the BSE at 1031 hours IST.
Maruti sold 1.22 lakh units in September, falling 24.4 %, compared to 1.62 lakh units sold in the same month in 2018, but the same increased by 15.2 % compared to the previous month due to low base.
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