Shares of Maruti Suzuki fell as much 3 per cent on Tuesday tracking the sustained rise in Japanese yen. Nearly 20 per cent of Maruti's cost is in yen, so the rupee-yen exchange rate plays an important role for Maruti's margins, analysts say.
Maruti's exposure to the yen is in the form of the royalty it pays to Suzuki. The raw materials imported from Japan are also priced in yen.
The appreciation in the yen against the rupee pushes up Maruti's import bill and hits profit, analysts say.
The yen on Tuesday rose to 115 against the US dollar, its highest since November 2014. It also strengthened against the rupee, rising to 0.60/rupee against its yesterday's levels of 0.58.
Maruti's shares have fallen 13.5 per cent over the last month, underperforming the 4 per cent decline in Nifty. India's biggest carmaker had last month missed profit estimates because of higher discounts. Maruti's January car sales were also below estimates.
Maruti's shares ended 1.7 per cent lower today at Rs 3,667 as compared to a 1.2 per cent fall in broader Nifty.
Maruti's exposure to the yen is in the form of the royalty it pays to Suzuki. The raw materials imported from Japan are also priced in yen.
The appreciation in the yen against the rupee pushes up Maruti's import bill and hits profit, analysts say.
The yen on Tuesday rose to 115 against the US dollar, its highest since November 2014. It also strengthened against the rupee, rising to 0.60/rupee against its yesterday's levels of 0.58.
Maruti's shares have fallen 13.5 per cent over the last month, underperforming the 4 per cent decline in Nifty. India's biggest carmaker had last month missed profit estimates because of higher discounts. Maruti's January car sales were also below estimates.
Maruti's shares ended 1.7 per cent lower today at Rs 3,667 as compared to a 1.2 per cent fall in broader Nifty.
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