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Buy Maruti Udyog – Citi

July 2, 2007

Citigroup Research just a while ago recommended a BUY on Maruti Udyog Ltd with a price target of Rs 945.

Domestic sales rose c26% YoY, buoyed by the sharp growth in the key sub-compact segment. The company sold 59,917 vehicles in June an increase of 0.9% over May-07. Maruti is expected to do well for the rest of the year. Citi rates the stock as a Low Risk BUY. 12-month target price of Rs945 is based on 11x P/CEPS FY09E. The multiple compares favorably with the cash earnings CAGR of c16.3% over FY07E-09E.

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