1. Maruti Suzuki India
The company has sold over 6 million vehicles since it was set up 17 years ago. Despite growing competition in recent years, it still commands half the Indian passenger car market; it has 562 dealers across the country.
However, it has not been unaffected by a slowing economic growth rate and high interest rates. In February, which usually sees high sales as people buy before the financial year ends to get the depreciation benefit, Maruti saw a marginal rise of 1.3 per cent in volumes. But the bright side is that exports rose 15 per cent that month over the same period last year.
Despite worries of the slowdown, the company is introducing new models aggressively. SX4 was a big hit and the new model, Dzire, is expected to rewrite rules in the C segment. To keep the cars rolling, Maruti is planning to expand capacity to 1 million units a year from the current 6,70,000.
While revenues grew 27 per cent in the December quarter, net profits grew slower at 24 per cent and margins fell a bit to 10.04 per cent from 10.30 per cent in the September quarter. It seems that the fear of inflation, which may not allow interest rates to fall, has been priced in by the markets and the stock has lost 30 per cent since September 2007.
Any upward movement in interest rates will affect the stock in the short run, but the car manufacturer will continue to benefit from the long-term India consumption story.
Image: Maruti Suzuki India CEO Shinzo Nakanishi poses in front of Maruti Suzuki's new car the Swift DZire. Raveendran/AFP/Getty Images
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