Buy Maruti Suzuki : Target Rs 1230
Sharekhan research is bullish on Maruti Suzuki and has maintained buy rating on the stock with target price of Rs 1230, in their December 24, 2007 report. “The views expressed by the new MD during the particular interview are in line with MSL’s earlier guidance and consequently we have factored the guidance offered by him in our estimates. We believe the outperformance witnessed in H1FY2008 with a strong volume growth of 19.3% will get decelerated to some extent in H2FY2008, as the high base effect catches up. We estimate MSL’s sales volumes would grow by 13.9% in H2FY2008. However, the company has a very strong product basket, with products in every segment of the passenger car market. At the current market price of Rs990, the stock is quoting at 12.9x its FY2009E earnings and at an enterprise value/EBIDTA of 8.2x. We maintain our Buy recommendation on the stock with a price target of Rs 1,230,” according to Sharekhan report.
