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TVS Suzuki: The parting kick?

THE mere fact that there is now a prospect of Suzuki moving out of TVS Suzuki could spark a downtrend in the TVS Suzuki stock in the short term.

The board of directors of TVS Suzuki is to meet on September 27 to consider settlement of differences as well as the possible exit of Suzuki from the venture or settlement. A Suzuki exit could cause some concern at a time when the company is trying to ge t a foothold in the four stroke motor cycles market. Here, the Suzuki linkage could have helped as the company has to come from way behind in the battle for market share with Hero Honda and Bajaj Auto. There is a possibility that the four stroke process may have been assimilated at TVS Suzuki and the company may be capable of handling the basic technology on its own. But the area where there could be some cause for worry is the product launches in this category which have to come at a quick pace in a hi ghly competitive market. There could be some concern over the possible negative consequences from a long-term perspective in a market that is rapidly changing by the day. If the possible exit of Suzuki from this venture also means its direct entry in the Indian markets, it could add to the competitive element. The specifics of the move such as the price and mode of exit may be known over the next few days. But a a weak trend may be in store for the TVS Suzuki stock. It may trade with a downward bias. Th e stock was down Rs 18 in Wednesday's trading to close at Rs 73. - BL Research Bureau