“Maruti as a stock may not do so great in next 6-12 months. Its earnings growth may not be as robust as the Street is expecting,” he said. (Watch)
Mr Shah said a stronger yen, subdued volume growth due to capacity constraints and investment in the expansion of Nexa network could weight on Maruti.
However, Maruti Suzuki remains a top pick for the long term, he said. “If somebody is taking a three-to-five year view, it is an excellent franchise having a market share of 50 per cent-plus. In a urban economy like us, there is a lot of demand for cars.”
“As a secular trend, it might do well but in the near to medium term it might underperform.”
Maruti Suzuki shares are down nearly 17 per cent in the last six months as compared to 7 per cent fall in the broader Nifty.
Maruti Suzuki shares traded 2.5 per cent lower at Rs 3,484 as against 0.6 per cent fall in the broader Nifty on Thursday.