Weak product cycle could lead to further market share loss for Maruti

Higher commodity prices could worsen its margin profile

Since its highs in January, the stock price of India’s largest passenger vehicle (PV) maker has slid 17 per cent. Maruti has also underperformed its peer index and its benchmarks over the last six months with returns of -3 per cent while the BSE Auto index and the Sensex are up 19-21 per cent during this period. Investors are concerned that the company has lost over 400 basis points market share since September and this trend would continue given its weaker presence in high growth segments. The decline in Maruti’s market share is due to a 500 basis points dip