Despite volume uptick, Maruti's rally may fizzle out on multiple headwinds

Competitive pressures, lower share of utility vehicle segment and margins are key worries

Recovery in volumes over the past three months has put the stock of India’s largest passenger vehicle (PV) maker Maruti Suzuki India (MSIL) on an upward trend.

The stock has recovered 79 per cent from its lows in April, but about a third of those gains have come in the past three months. At current levels it is just 7 per cent shy of its 52-week highs.

Led by the entry-level segment, the steadily increasing wholesale volumes have been the key trigger. In August, the company posted a 15-17 per cent growth over July and the year-ago period to 124,000 units.