Supply crisis, market share loss in SUV put Maruti's stock under pressure

Margin improvement for market leader in passenger vehicles may take time, say analysts.

Maruti Suzuki India’s stock hit highs in mid-November, but now has lost a fourth of its value due to the company losing market share, supply disruptions and pressure on profitability. Brokerages believe there are no near-term triggers for India’s largest passenger vehicle maker to reverse the downward trend. 

CLSA downgraded the stock to "underperform", given that the company was losing market share in the lucrative sports utility vehicle (SUV) segment. The company hasn’t had new launches in the segment, prompting analysts to expect volumes and margins to be under pressure with further downgrades in FY23 and FY24.

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