Maruti Suzuki rises as yen hits 4-year low against dollar
The stock has risen 8% since announcement of Q4 earnings on April 26, compared to 3.8% rise in Sensex.
Maruti Suzuki India has moved higher by over 3% to Rs 1,713 after the Japanese yen hit a fresh four-year low against the dollar. The stock currently trading near to its record high of Rs 1,740 touched in September 30, 2009, in intra-day trade on BSE.
The yen's depreciation has a direct impact on the company's margins. Raw material imports and royalty payouts are yen-denominated and account for 23% of sales. Maruti Suzuki imports auto parts from Japan and also pays royalty to Suzuki in yen.
Meanwhile, the stock has outperformed the market by gaining 8% since announcement of Q4 earnings on April 26, compared to 3.8% rise in benchmark Sensex.
Analyst at Edelweiss Securities maintains “Buy” on the stock with a target price of Rs 2,037 per share.
“We remain positive on Maruti Suzuki India due to an expected improvement in demand driven by favourable macroeconomic headwinds, leading to volume growth and margin expansion and favorable dollar/yen hedges,” says analyst in its report dated April 26, 2013.
The yen's depreciation has a direct impact on the company's margins. Raw material imports and royalty payouts are yen-denominated and account for 23% of sales. Maruti Suzuki imports auto parts from Japan and also pays royalty to Suzuki in yen.
Meanwhile, the stock has outperformed the market by gaining 8% since announcement of Q4 earnings on April 26, compared to 3.8% rise in benchmark Sensex.
Analyst at Edelweiss Securities maintains “Buy” on the stock with a target price of Rs 2,037 per share.
“We remain positive on Maruti Suzuki India due to an expected improvement in demand driven by favourable macroeconomic headwinds, leading to volume growth and margin expansion and favorable dollar/yen hedges,” says analyst in its report dated April 26, 2013.