Shares in Maruti Suzuki rose as much as 5.7 per cent on Tuesday after India's largest car maker said July-September net profit tripled from a year earlier. The better-than-expected numbers was driven by costs cuts and higher localisation, Maruti said.
Maruti shares traded 4.5 per cent higher at Rs. 1,581.55 on the NSE as of 09.31 a.m. after earlier hitting a high of Rs. 1,599. The stock was the top Nifty gainer and outperformed the broader benchmark, which dipped after a positive start. Maruti shares have risen 1.6 per cent so far this year, compared with a 6 per cent gain in the main index. (Track stock)
CLSA upgraded Maruti shares to "buy" from "outperform" post earnings announcement. The brokerage also upgraded its target price on the stock to Rs. 2,000 from Rs. 1,450 earlier.
Credit Suisse raised its target price on Maruti shares to Rs. 1,760, while retaining its "outperform" call.
Net profit in the July-September quarter was Rs. 670 crore compared with Rs. 227 crore a year earlier when a riot at its Manesar factory led to one death, over 100 injuries, a month-long shutdown and a $250 million production loss. The mean estimate of 12 analysts according to Thomson Reuters I/B/E/S was Rs. 552 crore. (Read earnings copy)
Revenue rose 27 per cent to Rs. 10,212 crore. Operating margin rose to 12.6 per cent from 11.4 per cent in the previous quarter, calculated on total operating income, helped by a positive foreign exchange impact, despite Maruti being forced to offer discounts to push sales.
However, Macquarie retained it "neutral" call on Maruti (target price Rs. 1,560) citing unsustainable margins.
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