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Will pass impending 4% excise hike to customers: Maruti

This 4 percent excise duty will have to be passed on to consumers as most companies do not have this kind of margin to absorb a 4 percent hike, Maruti chairman RC Bhargava says. He is not sure whether this price rise will have a demand impact, but believes it will not have a long-term impact.

Maruti  chairman RC Bhargava says he has not received any communication on excise duty concession being withdrawn or otherwise, which means that effective from midnight tonight, it stands withdrawn.

This 4 percent excise duty will have to be passed on to consumers as most companies do not have this kind of margin to absorb a 4 percent hike, he adds. He is not sure whether this price rise will have a demand impact, but believes it will not have a long-term impact.

Bhargava says overall retail sales in December have been good, but wholesale sales number may be muted. Maruti did not take any price hikes in December.

Quant Broking auto analyst Raghunandhan NL continues to remain positive on the auto sector despite the possibility of negative news on excise duty. He believes there could be a short-term demand impact, but on a longer term basis – considering that most auto companies have not increased prices over the past year, in fact discounts were on the rise, fuel prices have softened and the overall environment has turned upbeat – things remain positive for the sector.

Raghunandhan is bullish on Tata Motors , Eicher Motors ,  Maruti Suzuki and Hero Motocorp .

Stay tuned for more…

Maruti Suzuki stock price

On December 31, 2014, at 10:36 hrs Maruti Suzuki India was quoting at Rs 3337.00, down Rs 12.3, or 0.37 percent. The 52-week high of the share was Rs 3459.75 and the 52-week low was Rs 1541.25.


The company’s trailing 12-month (TTM) EPS was at Rs 102.82 per share as per the quarter ended September 2014. The stock’s price-to-earnings (P/E) ratio was 32.45. The latest book value of the company is Rs 694.45 per share. At current value, the price-to-book value of the company is 4.81.

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