Weak yen boosts Maruti Suzuki

Maruti Suzuki India rose 4.25% to Rs 1,366.90 at 10:56 IST on BSE after the Japanese yen tumbled against the dollar on Friday, 5 April 2013, after the Bank of Japan announced an aggressive monetary stimulus on Thursday, 4 April 2013.

Meanwhile, the BSE Sensex was down 23.12 points, or 0.12%, to 18,486.58.

On BSE, 43,000 shares were traded in the counter as against an average daily volume of 84,272 shares in the past one quarter.

The stock hit a high of Rs 1,370.35 and a low of Rs 1,324 so far during the day. The stock had hit a 52-week high of Rs 1,637.60 on 6 February 2013. The stock had hit a 52-week low of Rs 1,052 on 4 June 2012.

The stock had underperformed the market over the past one month till 4 April 2013, falling 5.88% compared with the Sensex's 1.95% fall. The scrip had also underperformed the market in past one quarter, sliding 15.08% as against Sensex's 6.44% fall.

The large-cap company has equity capital of Rs 144.46 crore. Face value per share is Rs 5.

The yen slid to a 3-1/2 year low against the dollar on Friday, 5 April 2013, after suffering its biggest one-day decline since late 2008 on Thursday, 4 April 2013, when the Bank of Japan (BoJ) surprised markets with a radical campaign of monetary expansion to reset its economy and pull out of nearly two decades of deflation.

BoJ announced an aggressive and ambitious plan Thursday to expand its purchase of long-term bonds and double the amount of money in circulation, all in an effort to boost inflation to 2% within two years and stimulate consumer and business spending.

Weak yen could boost earnings of Maruti Suzuki as it imports raw materials from its Japanese parent Suzuki Motor. It also pays annual royalty on sales to the Japanese parent.

Maruti Suzuki India's total vehicle sales rose 3.3% to 11.71 lakh units in the year ended March 2013 (FY13) over the year ended March 2012 (FY12). Domestic sales rose 4.4% to 10.51 lakh units in FY13 over FY12. The company's exports fell 5.5% to 1.20 lakh units in FY13 over FY12.

The company, however, reported weak sales in March 2013. The company's total sales declined 4.8% to 1.19 lakh units in March 2013 over March 2012. Domestic sales fell 4.3% to 1.07 lakh units in March 2013 over March 2012. Exports dropped 8.9% to 12,047 units in March 2013 over March 2012.

Maruti Suzuki India's net profit jumped 143.8% to Rs 501.29 crore on 45.6% growth in net sales to Rs 10956.95 crore in Q3 December 2012 over Q3 December 2011.

Japanese parent Suzuki Motor Corporation holds 54.21% stake in Maruti Suzuki India (as per the shareholding pattern as on 31 December 2012).

Powered by Capital Market - Live News