RC Bhargava, the former CEO and current chairman of Maruti Suzuki expects growth to go beyond 7 percent mark in 18 months. "Things are looking more optimistic this festive season," he adds.
One of the worst-affected sectors of the economic downturn was probably auto. RC Bhargava, the former CEO and current chairman of Maruti Suzuki , the country's largest carmaker, said demand will pick up only when the economy picks up pace.
On the brighter side, he expects growth to go beyond 7 percent mark in 18 months. "Things are looking more optimistic this festive season," he adds.
Kenichi Ayukawa, MD and CEO, Maruti Suzuki says demand is coming back, but it is mostly deferred demand. He says the company plans to launch light commercial vehicle, or LCV, by next calendar year.
Also Read: Maruti 2.0: Target of 3 million annual sales
Exclaiming his delight with diesel price deregulation, Bhargava says it has given the company clarity on product mix. He adds that the company has benefited from the revival of demand in the petrol car segment.
Maruti Suzuki also has a major presence in rural India. According to Bhargava, the rural market is immune to issues such as inflation.
The company has also been in news this year post an announcement from Suzuki that it would invest Rs 3,000 crore in a plant in Gujarat. Suzuki Motor Gujarat is a subsidiary of its Japanese parent Suzuki Motor Corp. The cars produced there would be sold to Maruti Suzuki. This in turn spooked many a investors as they feared that Suzuki will sell cars at a higher price to Maruti than it would have cost the latter if it were to manufacture them. According to an earlier plan, Maruti Suzuki was supposed to build the plant itself.
HDFC Mutual Fund, Axis Mutual Fund, ICICI Prudential Mutual Fund, Reliance Mutual Fund, SBI Mutual Fund, DSP BlackRock Mutual Fund and such other institutional investors are opposed to the plan. Maruti finally succumbed to investor pressure and market regulator Sebi in March and said that it would seek the approval of minority shareholders.
Bhargava has always maintained that the deal will benefit the company as well as its stakeholders greatly. He once again reiterated the same, while adding that he has not decided on minority shareholder vote yet.
Ayukawa on his part is optimistic and expects minority shareholders nod for Gujarat plant. He infact says there are no major dissenting voices with respect to Gujarat plans. He says the company is sincerely communication with institutional investors.
Posted By: Devika Ghosh
Maruti Suzuki stock price
On August 22, 2014, at 14:13 hrs Maruti Suzuki India was quoting at Rs 2743.65, down Rs 6.4, or 0.23 percent. The 52-week high of the share was Rs 2769.90 and the 52-week low was Rs 1217.00.
The company's trailing 12-month (TTM) EPS was at Rs 96.45 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 28.45. The latest book value of the company is Rs 694.45 per share. At current value, the price-to-book value of the company is 3.95.
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