After its first quarter results, the firm said it now expects full-year revenue to climb 4-7%, up from prior guidance of flat to down 5%.
In 2017 and 2018, Maruti's average earnings growth is expected to be 14.5% while global peers are staring at low-single-digit expansion, according to Bloomberg consensus.
Maruti trades at 23.2 times the next 12-month projected earnings, a 21% premium to its 5-year average.
A key reason is that the price earnings multiple has been fuelled by a late pick-up in earnings growth.
Market is trading at 16.9 times FY18 projected earnings, a 20% premium to long-term average.
The order inflow for the company is expected to be robust, as it took several initiatives to compensate for the moderation of orders from PowerGrid, one of its biggest customer.
JLR will have mid-cycle refresh of Range Rover and Range Rover Sport in the current year. This will further support the volume growth.
Contrary to general perception, buying EM stocks during the sell-off due to rise in interest rates by the US central bank has turned into a winning strategy of late.
The bank Nifty index’s earnings are expected to be Rs 959 and Rs 1,229 for 2017 and 2018, respectively, which implies growth of 17.9% and 28.2%.
India's outperformance is likely to continue in the near-term. The secular reform story will help Indian equities to maintain the safe haven tag among the EMs.
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