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Mumbai: CLSA downgraded its rating on Suzuki India to ‘sell’ from ‘underperforming’ and lowered the target price to 6,420 from 6,550 as the automaker has consistently lost market share in sport utility vehicle (SUV ) fastest growing and most profitable. segment.

“The company is likely to lose 600 basis points (basis points) of market share over the period FY20-22 in the domestic passenger vehicle industry due to the significant increase in the share of passenger vehicles. SUV segment tourism and Maruti’s loss of market share in that segment, ”CLSA said in a note.

Maruti Suzuki India shares ended down 1.7% to 7,202.15 yen on Friday.
CLSA said its earnings estimates are 17-20% below consensus for FY 23 and 24 as it continues to forecast market share losses for Maruti due to the weak model launch pipeline.

CLSA said the SUV segment’s share in the domestic passenger vehicle industry increased to 39% in FY 22 through October, from 32% in FY 20, while the share Maruti’s market share fell by 560 basis points in this segment. The brokerage firm estimates that Maruti’s profit before interest, taxes, depreciation and amortization per vehicle will drop to 55,656 in FY24 from 32,511 in FY22 assuming a 10% drop raw material costs and an improvement in its product line.

Maruti reported a 9.2% year-over-year drop in total sales for November to 1.4 lakh units.