Maruti Suzuki shares rise after Goldman Sachs retains ‘buy’ rating

SEBI found that Capital First did not make requisite disclosures about the encumbrances on shares of DCHL held by them, to the stock exchanges and DCHL.

Market regulator Securities and Exchange Board of India (SEBI) on August 25 imposed a penalty of Rs 6 lakh on Capital First Ltd for not disclosing encumbrance on shares of Deccan Chronicle Holdings Ltd (DCHL). Capital First (earlier known as Future Capital Holdings) merged with IDFC Bank in 2018 and the merged entity is called IDFC First Bank.

In its order, SEBI found that Capital First did not make requisite disclosures about the encumbrances on shares of DCHL held by them to the stock exchanges and DCHL. Capital First in October 2011 entered into a security net agreement (SNA) with the promoters of DCHL for 6.04 crore shares, which was 28.93 percent share capital of the company. Thereafter, in November 2011, it entered into non-disposal undertakings (NDUs) with the promoters for 3.30 crore shares, amounting to a 15.79 percent stake. It was observed that as and when the NDUs/SNAs were expiring they were replaced by entering into fresh NDUs/SNAs between the parties.

IRCTC sees profit booking after shares hit 52-week high

Shares of IRCTC had surged over six percent to hit a 52-week high of Rs 2,727. In the opening trade on Friday, the shares surged a percent higher to hit an intraday high of Rs 2,715 but then dropped a percent to Rs 2,664 after witnessing a bout of profit booking.The share price of Indian Railway Catering & Tourism (IRCTC) witnessed profit-booking on Friday after hitting a 52-week high of Rs 2,727.95. This came after the company’s board approved the proposal for a share split in earnings call on Thursday.

Shares of IRCTC surged over six percent to hit a 52-week high of Rs 2,727. In the opening trade on Friday, the shares surged a percent higher to hit an intraday high of Rs 2,715 but then dropped a percent to Rs 2,664 after witnessing a bout of profit booking.

While announcing the results of the first quarter for the financial year 2022, Indian Railways’ catering and tourism arm announced a split of IRCTC shares into 1:5. The stock split is subject to approval by Indian Railways and the Government of India.

If the approval gets a nod from the shareholders, the face value of its shares would decrease to Rs two from the existing Rs 10. Its share price will also come down five times to Rs 500-550.

While the stock split will not affect the company’s valuations, it will make the stock accessible to small investors.

IRCTC said the decision will help enhance its liquidity in the stock market, make the shares affordable to small investors, and widen its shareholder base.

The company reported a surge in net profit on Thursday. From a loss of Rs 24 crore a year ago, it has posted a net profit of Rs 82 crore for the first quarter of FY22. However, the net profit is lower QoQ. It reported a profit of Rs 103 crore in the fourth quarter of FY21.

IRCTC also reported an 85.4 percent rise in its revenue from operations YoY, to Rs 243 crore from  Rs 131 crore reported a year ago.

Segment-wise, while its revenue from the catering segment fell 37 percent to Rs 56 crore, YoY, its internet ticketing revenues rose over 300 percent to Rs 149 crore. Also, its revenue from the tourism category more than doubled to Rs seven crore, YoY.

Maruti Suzuki shares rise after Goldman Sachs retains ‘buy’ rating

Goldman Sachs’s target price for Maruti Suzuki is over 30 percent higher than its current market price of Rs 6,890. The brokerage firm said in its morning note that chip shortage could cause a sharper near-term production impact on the company.

The shares of Maruti Suzuki rose over half a percent in the morning session after Goldman Sachs retained a ‘buy’ rating on the stock despite the company cutting the production limit for August.

GS has a target price of Rs 9,036 per share, over 30 percent higher than its current market price of Rs 6,890. The brokerage firm said in its morning note that chip shortage could cause a sharper near-term production impact on the company.

Maruti Suzuki had said on Tuesday the semiconductor chip shortage could force it to cut vehicle production in August by 30-40 percent. This could make nearly three-fourths of the five percent annual production cut it forecasted earlier. The company is expected to produce 110,000-120,000 units this month, sources told ET Auto.

The brokerage said the setback in August production numbers could raise some concerns around the pre-festive stocking.

Automakers around the world have been hit hard as the shortage of microchips have disrupted supply chains. Microchips are silicon chips that power vehicles and other electrical and digital appliances. As many as 3,000 microchips are required to make modern vehicles work. Everything from engine control units, to a backup camera, and steering wheels need a microchip.

For all your investment needs feel free to reach us. Give us a missed call at 90037 90027. For Support : 044-40329999.