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Showing posts with label Maruti Udyog. Show all posts
Showing posts with label Maruti Udyog. Show all posts
Friday, October 03, 2008
Friday, September 12, 2008
Thursday, September 11, 2008
Sunday, July 27, 2008
Tuesday, July 22, 2008
Friday, May 16, 2008
Today's Pick - Maruti Suzuki
We recommend a buy in Maruti Suzuki India from a short-term perspective. From the charts of the stock it is clearly evident that it was on a long-term downtrend from its October 2007 high of Rs 1,252, forming lower peaks and lower troughs till late April 2008.
Triggered by the positive divergence in the daily momentum indicator, the stock began to move up taking support at around Rs 720 during late April. Since then the stock’s up move has been continuing. On May 15, the stock penetrated the long-term down trendline as well as the 50-day moving average by surging 3 per cent.
With this, we believe that the long-term downtrend of the stock has come to an end. We notice that there is an increase in volume traded over the past two trading sessions. The daily momentum indicator has entered the bullish zone. Also, the daily moving average convergence and divergence is on the brink of entering the positive territory.
Our short-term forecast for the stock is bullish. We expect it to rally to our target price level of Rs 910 in the upcoming trading sessions. Investor with short-term perspective can buy the stock while keeping the stop-loss at Rs 782.
via BL
Wednesday, May 14, 2008
Tuesday, May 13, 2008
Company Background - Maruti Suzuki
Maruti Udyog Ltd (MUL) was incorporated in February 1981 through an Act of Parliament, as a Government company with Suzuki Motor Corporation (SMC) of Japan. It was established to achieve the goals of modernization of Indian Automobile Industry, production of vehicles in large volumes and production of fuel efficient vehicles. Suzuki was an ultimate one to achieve this all because of their expertise in small cars segment.
The Joint Venture agreement was signed between Government of India and Suzuki Motor Corporation in October 1982. The Company went into production in a record time of 13 months marking the beginning of a revolution in the Indian automobile industry. The First car was rolled out for sale in December 1983. Initially, Suzuki was holding 26 per cent Stake. Now MUL is a subsidiary of Suzuki with an equity holding of 54.21 per cent.
Maruti Udyog has been the leader of the Indian car market for about two decades. Its manufacturing plant, located in Gurgaon, has an installed capacity of 3,50,000 units per annum, with a capability to produce about half a million vehicles.
Maruti produces cars with world-class contemporary Japanese Technology, suitably adapted to Indian conditions and Indian car users. It also provides users with a range of cars to suit different needs. The company has a portfolio of 11 brands, including Maruti 800, Omni, Premium small car Zen, International brands Alto and WagonR, off-roader Gypsy, mid size Esteem, Luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.
In 2001-02, the Cabinet Committee on divestment approved the exit of Government of India from the Joint Venture, Suzuki Motor Corporation, Government of India and the Company executed a Revised Joint Venture Agreement (RJVA). Pursuant to RJVA, the company made a further issue of 1,219,512 equity shares of Rs.100 each at a premium of Rs. 3,180 share each. On 30th May, 2002, the company allotted 1,216,341 equity shares aggregating to Rs. 398.96 crores in favour of SMC, which include the portion fully renounced by GOI besides SMC's own entitlement. 3,171 Equity Shares were duly cancelled as the Maruti Udyog Limited Employees Mutual Benefit Fund decided not to subscribe its right entitlement. After this allotments, the company has become the subsidiary of SMC.
In 2002-03, Pursuant to the Revised Joint Venture, the Government of India offered 72,243,300 equity shares, equivalent of 25 per cent of the company's share capital, for sale to the public. To enable the retail investor to participate widely in this offer, the company subdivided the face value of an equity share of Rs. 100 to Rs. 5. Despite depressed sentiment in the capital market, the issue was fully subscribed within three hours of opening.
Encouraged by the overwhelming response, the GOI exercised the greenshoe option and off-loaded an additional 10 per cent of the issue or 2.5 per cent of the company's share capital.
In the same year, Maruti Udyog and Suzuki Motor Corporation had jointly set-up a Joint-Venture company under the name Suzuki Metal India Limited (SMIL) to engage in the business of, inter alia, manufacturing Aluminium die casting or low pressure casting engine parts such as cylinder blocks, transmission cases, cylinder heads for four wheelers and two wheelers. This was created with a view to reduce material cost besides ensuring a smooth and uninterrupted supply.
In 2004-05, MUL in collaboration with Suzuki Motor Corporation has established a new company Maruti Suzuki Automobiles India Ltd. (MSAIL) for setting up a new manufacturing plant at Manesar. In this new entity, the company will hold 70 per cent equity the balance will be held by SMC. The company has also started the works to set up a new Engine and Transmission facility in collaboration with Suzuki Motor for the manufacture of diesel engines, petrol engines and transmission assemblies for four wheeled vehicles. This will reduce the cost of production of cars.
In 2006, Maruti Udyog acquired the 30 per cent equity stake of SMC in Maruti Suzuki Automobiles India Ltd. Subsequently, the company decided to amalgamate MSAIL with itself. Now, it has been amalgamated with MUL.
In recent years, Maruti has made major strides towards its goal of becoming Suzuki Motor Corporation's R & D hub for Asia. It has introduced upgraded versions of WagonR Zen and Esteem, fully designed and styled in-house. Maruti's contribution in the development of the Indian auto industry is a paramount one. Maruti tops customer satisfaction again for sixth year in a row according to the J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) study. The company's quality systems and practice have also been rated as a 'benchmark for the automotive industry world-wide' by A V Belgium, global auditors for International Organisation for Standardisation.
Maruti has also spread its wing in auto related service businesses. These were aimed at enhancing customer experience while building long term relationship. The company's service businesses including sale and purchase of pre owned cars (True Value), lease and fleet management service for corporates (N2N), Maruti Finance and Maruti Insurance are enabling the company to offer one-stop shop for the customers.
Tuesday, April 29, 2008
Thursday, April 03, 2008
India Strategy, MTNL, Jagran Prakashan, BHEL, Maruti Suzuki, Titan Industries, Automobiles
Labels:
Automobiles,
BHEL,
India Strategy,
Jagran Prakashan,
Maruti Udyog,
MTNL,
Research Report,
Titan Industries
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Wednesday, March 26, 2008
Tuesday, March 11, 2008
Saturday, March 01, 2008
Sunday, February 03, 2008
Maruti Suzuki
Investors with a two-three year perspective can consider buying the Maruti Suzuki stock. The company’s strong sales numbers in the backdrop of higher interest rates, its market leadership position in the compact car segment and improved product mix in the A2 (compact) and A3 (mid-size) segments are key positives that lend visibility to its earnings prospects.
At the current market price of Rs 904, the stock trades at an attractive valuation of about 15 times the trailing 12-month earnings, making it one of the cheapest stocks in the index basket. Considering the fall in market price in the recent corrections, we reiterate a buy on this stock.
Improved Realisations
The change in Maruti’s product portfolio over the last year in favour of cars such as the Swift, which is at the premium end of the compact segment, and SX4, the company’s midsized car, has consistently contributed to improved realisations over the past few quarters. For the first nine months of FY-08, realisations have improved by 8.5 per cent on a year-on-year basis.
Volume-driven growth
For the latest quarter, net sales rose 27 per cent to Rs 4,674 crore and net profits stood at Rs 467 crore, up 24 per cent Y-o-Y. Revenues were driven by volume growth of 17 per cent and realisation growth of 10 per cent.
Although volumes may face a moderation in 2008 due to high base effect and capacity constraints for the Swift and SX4, a scenario of reduced interest rates (the RBI has asked banks to review lending rates, given their high net interest margins and comfortable liquidity position), additions to the product line and ongoing capacity expansion will help sustain momentum.
Concerns about competition from the Tata Nano have impacted the stock performance. But these may be overdone as the only model that might be affected is the M800. The M800 contributes to less than 10 per cent of the revenues. Also, Maruti has embarked on its long-term plan of shedding its ‘small car maker’ image to fight competition and retain its market share.
The recent move into the midsize segment, the forthcoming sedan version of the Swift, the introduction of ‘Splash’ at the upper end of the compact segment, the re-launch of the Grand Vitara, a multi-utility vehicle ( MUV), and the expected launch of Kizashi in the A5 (premium sedan) segment in 2010 are all pointers to this. Besides, the company is boosting exports by adding markets such as Indonesia, Chile and Egypt for its existing models like M800, Alto and Zen and by launching the ‘A Star’ to cater exclusively to Europe. The company expects to double units of the A Star from the initial 1 lakh by 2010. All this bodes well for volume growth in the next two-three years.
Margins to STAY subdued
Operating margins stood at 13.15 per cent for the current quarter. Although it has remained flat sequentially, it has declined from 14.62 per cent in the June quarter. Escalation in raw material costs, increase in other direct costs such as power and fuel due to ongoing capacity expansion, discount offers, higher promotion expenses and royalty payment for new launches, are expected to keep margins subdued in the medium term.
The company is also sprucing up its retail initiatives. It has rolled out a Rs 7,000-crore plan to set up mega display-only showrooms across India and build warehouses for spare parts and vehicles to reduce lead time in delivering these to customers.
With a high volume strategy to defend its market share being foremost priority, Maruti will have to work with thin margins for the near term, with better product mix being the only factor that will help cushion this to an extent.
Friday, February 01, 2008
Wednesday, January 30, 2008
Tuesday, January 15, 2008
Bajaj Auto,Bharat Forge, Cairn, Financial Tech, JP Associates, Maruti Suzuki, MTNL, Reliance Capital, Reliance Industries, Unitech, VSNL
Monday, January 14, 2008
Thursday, January 10, 2008
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