Raamdeo Agrawal said that for a long-term investor, the Maruti strike brought a good buying opportunity though the strike was not a good sign of the way they were managing their labour relations. This is happening almost every year now, he said, and added that investors had to give discount for the management’s inability.
He was critical of Maruti’s inability to ensure a peaceful labour environment does reflect negatively on them. However, he was not in favour of selling the Maruti stock. Raamdeo Agrawal pointed out that Maruti Suzuki was manufacturing about 15-20 million cars in a population of 1,200 million. So the size of the opportunity is huge, and they have a 40-50 percent at entry level. They are the kings and then they are present in global markets too. So while the opportunity size is massive, the competence is also beyond doubt, he added.
Raamdeo Agrawal emphasized that Maruti’s problems are temporary and could be sorted out easily by appointing a good HR manager, a change of CEO or something like that might do the trick.
Raamdeo Agrawal advised that at a price below Rs. 1,000, Maruti Suzuki was a good value buy.