Business Today

Future hazy

This year, Indias largest car maker, Maruti Suzuki, is the second best performing stock among automobile companies in the world.
Sumant Banerji   New Delhi     Print Edition: December 3, 2017
Future hazy

This year, Indias largest car maker, Maruti Suzuki, is the second best performing stock among automobile companies in the world. In the last 12 months, its share price has risen nearly 52 per cent. After another stellar set of financials for the second quarter - revenues up 7.1 per cent, profits up 3.4 per cent - the stock hit an all-time high of `8,370.45.

The company is on a high. Consumers are queuing up for its cars like never before. Yet, T. Suzuki, Chief Executive Officer of the parent company Suzuki Motor Corp, struck a note of caution by admitting that the results do not offer much comfort. Why? Suzuki thinks Maruti may end up being flat-footed should electric mobility suddenly take off in the country. The government is planning to electrify all cars by 2030 and Suzuki Motor Corp, which does not have even one full electric vehicle, is seen as a laggard. That may put Maruti in a vulnerable position. It may need is to take a leaf out of the only car company that is a bigger favourite with investors this year - Tesla.

Sumant Banerji

 

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