Maruti Suzuki India shares fell a percent intraday on Friday after Kotak Institutional Equities downgraded its rating on the stock to add from buy earlier.
The research house also slashed price target to Rs 7,500 from Rs 7,600 apiece after cut in earnings per share estimates.
The stock was quoting at Rs 6,978.50, down Rs 52.15, or 0.74 percent on the BSE, at 15:10 hours IST.
The brokerage house said the domestic passenger vehicle (PV) industry is likely to grow in low single digit (6 percent CAGR over the next two years) due to increase in costs related to stricter safety and emission regulations.
“While Maruti is better-placed and will gain market share, we cut EPS estimates by 4-9 percent for FY2019-21 mainly driven by cut in volume estimates (lower industry growth assumptions) and EBITDA margin forecasts (factoring in lower operating leverage and higher costs related to safety regulations in entry-level models), it added.
The brokerage expects Maruti Suzuki to increase its market share in the passenger vehicle industry in India by 290 bps over FY2019-23 led by a shift in consumer preference towards petrol vehicles against diesel, especially in compact SUV and compact car segments.
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.