Global brokerage firm HSBC has maintained buy call on Maruti, but slashed target price to Rs 8,700 from 9,000 earlier as the sector trends are still weak and November was no different.
Maruti Suzuki India shares declined nearly half a percent intraday and a percent from its morning high on Tuesday after the company offered exchange bonus and discounts on several car models.
The stock was quoting at Rs 7,731.00, down Rs 28.80, or 0.37 percent on the BSE, at 10:21 hours IST.
Maruti dealers told CNBC-TV18 that Maruti Suzuki is offering exchange bonus on Vitara Brezza for the first time and savings of up to Rs 90,000 on various cars in Delhi.
Savings comprise cash discounts, exchange bonus & other benefits, they said.
Analysts said this could be on account of muted sales growth in past couple of months due to moderate festive season, liquidity crisis in non-banking finance companies and non-availability of retail finance.
The country's largest car maker is offering exchange bonus of Rs 25,000 on Vitara Brezza in December and up to 40 percent more savings on Alto K10 & Celerio in December versus November.
The savings offered on new Ciaz is up to Rs 90,000 while Maruti raised total savings offer on Baleno by 15 percent, Dzire by up to 50 percent and Swift by 14 percent in December against November.
The company sold 1,53,539 units in November, lower by 0.7 percent compared to 1,54,600 units sold in same month last year. In October, the company's sales increased by merely 0.2 percent YoY.
Mini car segment, which comprises Alto & WagonR, registered a 21.6 percent degrowth in November YoY while compact car division (under which it sold Swift, Celerio, Ignis, Baleno and Dzire) sales increased 10.8 percent.
Utility vehicles sales increased just 1.9 percent YoY, which comprises S-Cross, Vitara Brezza, Ertiga etc. Light commercial vehicles sales increased 112.2 percent to 2,128 units YoY.
Global brokerage firm HSBC has maintained buy call on the stock, but slashed target price to Rs 8,700 from 9,000 earlier as the sector trends are still weak and November was no different.
"Retail pick-up remained weak, & December volumes could be worse as dealers look to reduce channel inventory," the research house said, adding the flat YoY growth in November volumes wasn't much weaker than lowered market expectations.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
