Share price of Maruti Suzuki, the largest car manufacturer in India, fell 3.5% in today's trade, after global brokerage house UBS downgraded its rating to sell from buy.
UBS has slashed the target price by 27.5% to Rs 5,800/share from Rs 8,000/share.
Recently in a regulatory filing, Maruti Suzuki India had announced that the company had cut vehicle production for the fourth consecutive month in May, as weak domestic demand left the stockyards chock-full of unsold vehicles.
"We are surprised by sharp 20% plus decline in volumes in April and May 2019," said the investment adviser. "We expect a 2% year-on-year decline in growth in FY20E against 4% growth earlier," the brokerage added.
On Thurday, Maruti Suzuki also increased prices of new variant cars as the company became the first car manufacturer to introduce BS-VI compliant models in the market.
"Maruti is unlikely to benefit from BS-VI and we have not built in negative operating leverage in our recommendations," the brokerage added.
The stock touched an intraday low of Rs 6,382.30, after a 3.84% fall from the previous close. Maruti Suzuki's stock price is trading mere 0.95% away from 52-week low of Rs 6,324.35.A total of 13.45 lakh shares and 0.73 lakh shares are changed hands on NSE and BSE, respectively.
Maruti stock price closed at Rs 6,425, down by 2.90% on NSE and at Rs 6,412, down by 3.39% on BSE platform.
(Edited by Rupa Burman Roy)