Pak Suzuki raises car prices – Alfalah Securities Limited

Karachih: Pak Suzuki Motor Company Ltd. (PSMC) has raised its car prices within the range of PkR 10,000 to PkR 110,000 on various models from April 1, 2012.

According to Alfalah Securities Limited, the price of Suzuki Mehran is increased by PkR 10,000, Alto by PkR 20,000, Cultus by PkR 25,000, Swift by PkR 40,000 while the prices of Bolan and Ravi are increased by PkR 15,000 each. The prices of Liana witnessed an exorbitant surge of PkR 110,000. The car assemblers are raising the prices of automobiles due to rising cost of production and devaluation of Pak Rupee against the Japanese Yen. The higher prices of cars would result in decline in sales volume for the company as it caters to more prices sensitive segment of consumers which is likely erode the benefit of higher margins. PSMC is trading at a CY11 P/E of 6.8x and dividend yield of 3% where Alfalah Securities Limited recommends a “Hold” on the stock.