Weak 2Q09; expect rebound in 2H09 Expect weak 2QFY09; BUY on dips for a better 2HFY09 Maruti has outperformed the BSE Sensex by 29.9% since 1 August, 2008 (up 19.5% vs Sensex down 10.4%). In the near term, we expect Maruti’s stock to be under pressure due to weak 2QFY09 results. We believe dips in the stock price following the 2QFY09 results (likely to be declared in the last week of October) should be viewed as good buying opportunity for long-term investors as we see several positive catalysts unfolding for Maruti over the next six to eight months. Maruti is trading at 11.1x FY09 EPS and 9.4x FY10 EPS compared to the 2004-07 trading range of 11.0-17.0x. Our TP of INR840 is based on 11.0x FY10 EPS.

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