Analysts' corner

Maruti Suzuki & Hindustan Zinc

MARUTI SUZUKI
Reco price: Rs 1,186
Target price: Rs 1,322
Maruti Suzuki unveiled the next generation of the new Swift in the premium compact car segment, with the base version priced at Rs 4.22 lakh and Rs 5.17 lakh (ex-showroom Delhi) for the petrol and the diesel version, respectively. The new car has 140 new features and is built on a completely new platform, compared to its predecessor. It is also expected to offer higher fuel efficiency, on account of reduction in weight. This due to several R&D efforts taken by the company. According to the management, Rs 550 crore has been invested by Maruti and its suppliers in developing the new car, which has 95 per cent localisation levels. Also, it will replace the older version, production of which has already stopped since July. The new car will roll out from the Gurgaon facility, which has an initial production capacity of 16,000-18,000 units per month. Analysts expect Maruti's market share to remain under pressure due to higher competition in the compact car segment. Maintain accumulate.

— Angel Broking

HINDUSTAN ZINC
Reco price: Rs 123
Target price: Rs 150
HSBC has analysed the impact on Hindustan Zinc's (HZ) earnings and valuations for zinc prices, if the MMDR bill goes through. Assuming zinc prices fall to $1,800 per tonne and the royalties are doubled, HZ would still make an Ebitda of over $1 billion. Also, its valuation would still be Rs 110 per share versus the current market price of Rs 123 per share. HZ is a safe bet during uncertain times, due to its strong cash reserves, which will be $5.5 billion by FY13. On valuations (FY13 estimated EV/Ebitda of 3.4 and P/B of 1.5 times), HZ is trading below five-year averages. Upgraded to overweight from neutral.

— HSBC Global Research