Shares of India's largest carmaker Maruti Suzuki rose as much as 2.1 percent, after Morgan Stanley upgraded the stock to overweight from equal-weight and raised its target price to Rs 1,599 from Rs 1,181.
Maruti Suzuki also expects two-fold growth in its passenger car sales in FY13 against last year. However the projected growth of 7-10 percent is still lower that the 30 percent it accelerated in 2010-11.
Morgan Stanley also added Maruti Suzuki to its focus list in place of Bajaj Auto as it expects Maruti to add 1 percent of market share in FY13.
"We have been on the sidelines for MSIL, as the industry was slowing, competition was intensifying and currency movement was adverse - but we now see all three beginning to turn favorable," said Morgan Stanley in a report.
The bank raised its FY13 earning estimates for Maruti by 23 percent and said it would earn 37 percent of revenues from diesel cars in FY13 compared to 30 percent in FY12.
Maruti Suzuki's Chairman RC Bhargava expects car sales to increase by 10 percent in FY13 led by diesel models. But the first half of FY13 is likely to be tough for the automaker due to high interest rates and soaring fuel prices.In an exclusive interview with CNBC-TV18, Shashank Srivastavam chief general manager-marketing at Maruti, said "I don't see the fundamentals changing at this point of time.. and I think the first half of this fiscal year is going to be tough for the industry."
At 12:12 p.m, shares of Maruti Suzuki were up 1.82 percent at Rs 1,333.40.
With inputs from Reuters
Published Date: Apr 04, 2012 12:46 PM | Updated Date: Dec 20, 2014 07:32 AM