(123)456 7890 [email protected]

How Maruti shares price has plummeted by a third

How Maruti shares price has plummeted by a third

Updated September 28, 2018 08:19:28 Maruti is set to lose more than half its market value this year after the company posted its biggest fall in three years.

The shares price fell to about US$1.30 on Thursday, down from US$2.10 a year ago, after the manufacturer reported a 7.4 per cent decline in sales for the three months to September 30, its biggest drop since the year ended June 2016.

Maruti’s market cap is at $4.2 billion and its net debt is about US $7.4 billion.

The drop comes as Maruti looks to slash costs and reduce debt to improve its business.

The company has already slashed prices by more than 20 per cent this year, while its sales have also fallen by about 40 per cent from 2016.

The firm’s shares fell by about 50 per cent in 2018 and 2018’s results are set to fall by another 10 per cent by 2021.

The worst hit is the auto division, where Maruti’s share price has fallen by more that 30 per cent since April.

Maruti has also lost nearly half its value this quarter, with shares dropping about 26 per cent over the past three months.

The Maruti-owned company has also slashed its dividend by more of a third, which will also see its share price fall.

Analysts said the drop in Maruti was unlikely to have much effect on the company’s financial performance.

“There is no reason to believe that Maruti will have a positive cash position, given the recent fall in earnings, which has been the primary driver of its decline,” Mr Bhatt said.

“The share price was likely to continue its downward trend after the dividend cut.”

But the dividend is unlikely to make up for this shortfall.

This is because the company is still running a large debt burden, which is likely to make its long-term debt sustainability difficult.

“The stock’s decline comes after the Australian Securities Exchange (ASX) slashed its price target for Maruti to $4 from $4 a share.

Topics:business-economics-and-finance,investment,business-insurance,stockmarket,industries,finance-and.finance More stories from New South Wales