Maruti Suzuki: Brokerage divided on auto stock over Grand Vitara launch—Here's why

Even as Maruti Suzuki on Monday launched its latest flagship offering from NEXA—the Grand Vitara in India, global brokerages remained divided on the auto stock. Global brokerage firm CLSA recommended a sell, while Morgan Stanley remained bullish on the counter.  

CLSA maintained its sell stance on Maruti Suzuki shares for a target price of Rs 7374. The bearishness of the brokerage was largely based on pricing of Maruti's newest mid-sized SUV. It said though bookings for Grand Vitara exceeded 57000, pricing remains higher than Toyota Hyryder.  Maruti Suzuki had introduced Vitara at a starting price of Rs 10.45 lakh. 

It feels Consensus estimates are too bullish on market share gains, given increasing competitive intensity. I was of the view that the company will not be able to significantly gain market share in the SUV segment. "Consensus estimates will be downgraded," it adds. 

Morgan Stanley maintained an Overweight stance on the auto stock for a target price of Rs 9839.  

Contrary to CLSA, it feels Maruti Suzuki's Grand Vitara prices are largely in line. On comparison with Toyota's latest SUV, it said while strong hybrid is priced Rs 50,000 higher than Toyota Hyryder,  mild hybrid is priced Rs 20,000 lower.  

Further, talking about the rationale behind its bullishness on Maruti Suzuki India Limited (MSIL), it said the company is also offering incentives worth Rs 67,000 and order book also remains strong at 57, 000 units.  

Meanwhile, brokerage house Nomura, which also feels Grand Vitara Hybrids is priced at a premium, maintained a Neutral view with target price of Rs 8970.   

Macquarie on Maruti Suzuki retained its outperform rating on Maruti Suzuki for target price of Rs 9688.  

Earlier, Maruti Suzuki launched its mid-sized SUV Grand Vitara in India on Monday. The vehicle was first unveiled by the company in July. The new Grand Vitara comes with 5-speed manual and 6-speed automatic transmission options along with 9 colours0—NEXA Blue, Arctic White, Splendid Silver, Grandeur Grey, Chestnut Brown (Not Available in Sigma), Opulent Red (Delta/Zeta only), Arctic White + Black (Zeta+/Alpha/Alpha+ only), Splendid Silver + Black (Zeta+/Alpha/Alpha+ only), and Opulent Red + Black (Zeta+/Alpha/Alpha+ only).