Synopsis
The Japanese yen has depreciated by around 10% since March 2022 against the US dollar to 128, the lowest in nearly twenty years, owing to the widening policy gap between the Bank of Japan and the US Federal Reserve. This would translate into lower sourcing cost for parts imported by Maruti from Japan.
The stock of Maruti Suzuki India has gained 6.5 per cent over the past month despite firm input costs thereby outperforming the benchmark Nifty50 which has lost 1.7% on concerns over rising inflation.
What has worked in favour of the country’s largest passenger car maker is the weakness in the yen, the currency in which the company sources raw materials from Japan. This is expected to help Maruti to lower the drag on the operating margin due
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