Bandyopadhyay positive about Maruti Suzuki stocks

Tuesday 01 May 2012, 23:46 PM by

Sudip Bandyopadhyay, MD & CEO, Destimoney Securities, said that TCS and Maruti Suzuki will remain top picks. He told CNBC-TV18, “I will pick up TCS. We have been bullish on TCS for about 6 months plus and it still continues have lot of steam left performance wise, growth potential wise and even on the fundamental parameters, we will like to go with TCS.”

He said that he will also buy stocks of Maruti Suzuki. According to him, Maruti will attain huge growth after the launch of its new SUV. At present, SUV segment comprises around 15% of the total four wheeler market of India, where Maruti has no presence. Bandyopadhyay foresees good market share to be attained by Maruti after the launch of its SUV.

The company has incurred production loses last year due to depreciation of Indian Rupee in international market, labour strike at Manesar plant, and rising input cost. Market share of the car maker also fell below 40 percent due to the decrease in its sales percentage. Net profit for the fiscal went down by 28.6% whereas domestic sales and export declined by 11.2 and 7.9 per cent respectively.

Bandyopadhyay thinks that the company will recover last years production loses and will be back on the track. He said, “There is a concern regarding the Forex hedging policy but as the company clarified about 50% of the exposure they will henceforth be hedged always. So that’s a very positive sign.” According to him, Maruti will be top pick among all four wheeler companies.

Although, there has been 3 percent decrease in net profit of Maruti Suzuki during the 2011-12 financial year, analysts suggests the purchase of its stock as profit is expected in the future.

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