Morgan Stanley upgrades Maruti Suzuki

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.

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.

[caption id=“attachment_266085” align=“alignleft” width=“380” caption=“Maruti Suzuki’s Chairman RC Bhargava expects car sales to increase by 10 percent in FY13 led by diesel models. Reuters”]  [/caption]

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.

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Maruti Suzuki’s Chairman RC Bhargava expects car sales to increase by 10 percent in FY13 led by diesel models, he told reporters in late March.

At 12:12 p.m, shares of Maruti Suzuki were up 1.82 percent at Rs 1,333.40.

Reuters