The shares of Maruti Suzuki India surged 2% in the morning session on June 16 after Jefferies upgraded it to buy.
The global research company has set a target price of Rs 10,250 per share, implying a 28 percent increase in value. Over the next three years, the firm expects earnings to more than triple, noting that passenger car demand is currently high.
“A boost should be provided by a replacement cycle with a preference for personal mobility. Metal prices are falling, which could help margins recover from a recent low “It was said.
The stock was trading at Rs 8,012.60 at 09:47 a.m., up Rs 159.85 or 2.04%. It has traded between a high of Rs 8,025 and a low of Rs 7,924.70 during the day.
Motilal Oswal Securities recently maintained a buy recommendation on the company with a Rs 10,000 target price. UBS has also maintained a buy rating and a Rs 10,000 target price. Credit Suisse has its outperform rating and a target price of Rs 10,103, while Nomura Research keeps its neutral rating and a target price of Rs 8,627.
Maruti Suzuki’s product pipeline, according to Motilal Oswal, has just begun with crucial model improvements and is on the verge of introducing several new models in September. “On the other hand, with the bulk of new model launches behind us, the product pipeline of other OEMs (original equipment manufacturers) is peaking out,” it stated.
While the resumption of product lifecycle will drive market share recovery (600 basis points by the end of FY24), robust demand, increasing supply, and stable commodity prices will fuel a 550 basis point increase in Maruti’s operating profit margin, according to the brokerage.