Shares in Maruti Suzuki gain 2.8 percent after earlier touching its highest level since Jan 4, 2011, after CLSA upgraded the stock to 'buy' from 'sell' with a target price of 1,915 rupees.
CLSA says Maruti's earnings is improving, with passenger vehicle demand seen gradually recovering over fiscal 2014-15 on the back of improving economic growth and falling interest rates, according to a note dated on Saturday.
The brokerage also says Maruti's renewed focus on exports and the launch of a new compact sports utility vehicle will add to volumes.
Earnings sensitivity to the Japanese yen will also wane as the company builds more cars in India and boosts exports, CLSA says.
CLSA's upgrade comes as the majority of analysts already have 'buy' or equivalent ratings, with 14 'buy' and 19 'outperform' ratings, as per I/B/E/S estimates.