Up 47% this year, Maruti likely to gain up to 18% more: CLSA

Maruti is well placed to enhance its dominance further in the passenger vehicle segment. NSEBSEMaruti SuzukiLoading data…

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    ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIESMaruti Suzuki IndiaLoading data…

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      ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES India’s largest car-maker Maruti Suzuki India could potentially rise another 18 per cent going ahead even after the near 47 per cent jump in the current calendar year, Hong Kong headquartered brokerage CLSA said.

      The brokerage has a target price of Rs 9,230 on the stock with a ‘buy’ rating, which implies the 18.28 per cent potential upside from current levels. The stock closed at Rs 7,803.75 on Monday, down 0.1 per cent from the previous close.

      CLSA said that Maruti is well placed to enhance its dominance further in the passenger vehicle segment by targeting higher priced pas senger vehicles area, where there is a dearth of good models in the price range of Rs 12 lakh to Rs 20 lakh.

      A majority of the products available in the Indian passenger vehicle market are priced between Rs 4 lakh and Rs 12 lakh, with large product gaps in the higher priced segment. «We believe Maruti is now well-placed to extend its presence in higher-priced PVs and should target the large whitespaces in the Rs 1.2-2.0 million price range (Rs 12 lakh to Rs 20 lakh),» said CLSA in a note on Sunday.

      CLSA said Maruti’s new premium dealership channel Nexa is also making its brand more acceptable in the higher priced segment. So far this year, Maruti Suzuki has gained 46.6 per cent compared to an 18.3 per cent gain in the BSE Auto Index and the 19.1 per cent rise in the benchmark 30-stock Sensex.

      According to Bloomberg data, the stock is trading at a PE ratio of 28.8 times on an one-year forward earnings basis.

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