Maintain Sell rating on Maruti Suzuki India - Kotak

Lower other expenses lead to positive surprise. Maruti Suzuki reported a better-than-expected 2QFY13 driven by lower-than-expected royalty and advertising expenses. Net revenues were 3% higher than our estimates due to ~Rs2.9 bn CKD exports of Ertiga in our view.

We believe industry volume growth is likely to remain muted over the next 12 months given weak economic environment and high cost of ownership. We expect Maruti to lose market share as consumers shift to premium compact segment.

We maintain our SELL rating on the stock with an unchanged target price of Rs1,100.

Source : Equity Bulls

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