Multiple headwinds override valuation comfort in Maruti Suzuki

While earnings estimates are cut, analysts hint at volume and margin recovery

It was a smooth ride for the stock of Maruti Suzuki for a better part of the last three months. India’s largest passenger vehicle maker posted a return of 27 per cent from its lows in December to its highs last month sharply outperforming its peer index, the Nifty Auto, which delivered a third of this return in this period.

Waning impact of the omicron virus, easing semiconductor supply, strong order backlog and margin gains in the December quarter (Q3FY22) contributed to the improved sentiment. However, the gains evapourated with the worsening geopolitical situation putting at risk the narrative of