Shares of Maruti Suzuki was in top gear after posting quarterly results. Commenting on the same, Amar Ambani, Head of Research, IIFL said, “Maruti Suzuki results were in line with estimates. While OPM was tad ahead of our and street estimates, higher tax rate restricted PAT growth. Going ahead, we expect Maruti to see industry beating volume growth driven by the new launches and deeper penetration. Margins have upsides from current levels considering soft commodity prices, favourable currency movement and benefits of operating leverage. For FY15-18E we expect earnings CAGR of 34% and in that light FY18E P/E of 15x appears reasonable.”
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