‘Rising yen to hit Maruti Suzuki’s margins’

Margins of Maruti Suzuki India will be impacted from the third quarter of FY-12 onwards due to rising Yen, giving further blow to the company that has faced a series of labour unrests at its Manesar plant, according to Nomura Equity Research.“MSI had a weak first half in FY-12, impacted by strikes and weak demand. Given the low base, we expect volume growth to be strong in FY-13. However, that may not be enough to offset the impact of 12 percent appreciation in the Japanese Yen over the last four months, which will impact margins from third quarter of FY-12 onwards,” Nomura said in a statement.

It said that MSI’s targeted localisation over the next three years will compensate for a mere 5 percent of the appreciation in the yen.