Maruti Suzuki’s Suppliers Under Pressure

Maruti Suzuki India Ltd.’s suppliers are facing the brunt of the carmaker’s stock price slump.

While shares of India’s largest carmaker have fallen nearly 10 percent in 2018, stocks of three of its four suppliers, who get at least 10 percent of their revenue from Maruti, have seen sharper cuts.

Jay Bharat Maruti Ltd., which gets 82 percent of its revenue from Maruti, has seen its stock price decline 27 percent this year. Machino Plastics Ltd., which gets more than 90 percent of its revenue from Maruti, has seen its shares fall 18 percent in 2018.

Shares of Sona Koyo Steering Systems Ltd. have outperformed on a relative basis, falling under 7 percent. The company relies on Maruti for 63 percent of its revenue.

The 2011 Experience

The last time Maruti stock posted negative annual returns was in 2011. Then, the carmaker’s stock fell 35 percent, and shares of its suppliers, barring Bharat Seats Ltd., lost more.

Jay Bharat Maruti was the worst hit with a 56 percent drop. Machino Plastics followed, losing more than 40 percent.