CLSA downgrades Maruti Suzuki to 'sell' from 'underperform', saying a recovery in demand for passenger vehicles might not be as large as expected.
The brokerage adds the demand profile for the industry is changing in ways that don't favour Maruti: moving away from the small cars the auto maker dominates, and into large cars and utility vehicles where Maruti's share is increasing but not enough to offset the impact from smaller cars.
"We believe that Maruti's stock is already pricing in a demand recovery and that a big leap of faith needs to be taken on 20%-plus industry growth to be positive post recent rally," CLSA says in a note.
