Maruti Suzuki India shares plunged as much as 3.40 per cent in the morning trade on Thursday after Yen hits fresh 17-month high against dollar on Thursday.
At 10.38 am, shares of the auto major were trading 3.03 per cent down at Rs 3,463.55. The scrip opened at Rs 3,578 and has touched a high of Rs 3,578 and Rs 3450, respectively, in trade so far. Sensex was trading 195.78 points down at 24,704.85.
Later, the scrip closed 2.81 per cent down at Rs 3,471.35. Sensex closed 215.21 points, or 0.86 per cent, down at 24,685.42.
According to HSBC, Yen benefit has started to reverse and is a significant headwind in the near term. The global financial services company further added that every 1 per cent appreciation in Yen affects 15-20 basis points of operating margin for Maruti Suzuki.
HSBC also cut target price of Maruti Suzuki shares to Rs 4,100 from Rs 4,300 earlier and said valuations are still ‘undemanding’. It maintained ‘hold’ rating on Maruti Suzuki shares.
The yen powered to 17-month peaks on Thursday, hitting Japanese exporter stocks in the process, while a broadly soft dollar gave extra legs to a rally in oil prices.
Maruti Suzuki India (MSI) on April 1 posted a 15.9 per cent rise in total sales in March at 1,29,345 units as against 1,11,555 units in the same month last year.
(With inputs from Reuters)