Tag: auto stocks

Escorts Kubota Q4 results: Profit grows 30% but revenue slips, 180% dividend announced

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tractor manufacturing firm Escorts Kubota reported its results for the January to March 2024 period in which its net profit jumped 30.5% year-on-year to ₹242 crore, as compared to ₹185.5 crore in the same quarter of the previous fiscal.

The company’s revenue for the fourth quarter of 2023-24 financial year declined 4.6% YoY to ₹2,082.5 crore as against ₹2,183 crore in the March 2023 ended quarter.

On the operational front, Escorts Kubota saw its earnings before interest, taxes, depreciation, and amortization (EBITDA) rise 12.8% annually for the quarter under review to ₹266 crore. In the same quarter of the previous fiscal, the firm’s EBITDA had come in at ₹236 crore.

The firm’s margin increased to 12.7% from 10.8%, in line with brokerage firm Motilal Oswal’s estimates. However, when compared on a sequential basis, the margin has contracted as it was recorded at 13.5% for October to December 2023 quarter.

Alongside Q4 results, Escorts Kubota has also announced a dividend of ₹18 (180%) per fully paid-up equity share of ₹10 each for the financial year 2023-24 on all equity shares that will be held on the record date, which will be announced after approval of the shareholders at the ensuing Annual General Meeting (AGM).

The Q4 results come at a time when the quarter has been a very weak one for the tractor industry. Escorts Kubota saw 14% YoY decline in tractor sales in the last quarter of FY24. On the back of weak agriculture demand, the EBITDA margin was expected to contract, according to analysts.

Even as the stock has given a return of more than 66% in 2024 (year-to-date), following Q4 results, the stock was in red. It traded over 2% lower at ₹3,455.20 on BSE at 3:24 pm.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

TVS Motor shares can ride over 25% higher to cross ₹2,500 soon, says analyst after Q4 results

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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TVS Motor Company shares gained nearly 5% on May 9 after the automakers reported its quarterly results for the January to March 2024 period, in which it beat CNBC-TV18 poll expectations on most fronts, except profit.

TVS shares traded 4% higher at ₹2,074.50 on NSE at 1:24 pm. In the past year, the stock has given a return of more than 68%, slightly outperforming the sectoral index Nifty Auto which has gone up 66% during the period. 

Despite Q4 results being on expected lines, analysts seem divided on the stock’s performance going forward. While Bernstein has given it an outperform call, Jefferies suggests buying it but Motilal Oswal has maintained its neutral stance on it.

Bernstein pointed out that the earnings reveal volume growth was the key driver. It, however, noted that earnings before interest and taxes (EBIT) margin slid a bit in Q4 and that it’s an area where the company lags peers materially, which presents room for a catch-up.

TVS Motor remains a preferred stock and stacks up after Bajaj Auto in the brokerage’s pecking order. It has set the target price at ₹2,050, which the stock already crossed in today’s session.

Jefferies highlighted that the company’s Q4 EBITDA and recurring profit after tax (PAT) grew 36-43% year-on-year to new highs. EBITDA margin rose 10 basis points sequentially to 11.3% while EBITDA per vehicle was up 4% quarter-on-quarter, it added.

The brokerage believes the company will be a key beneficiary of two-wheeler demand revival in domestic and export markets. An improving franchise also provides headroom for further margin expansion, it added.

Noting that TVS’ earning per share (EPS) has more than trebled in the last three years, the analyst expects it to more than double in the next three years.

Jefferies, with a buy rating, has set the target price at ₹2,525, implying a 26% upside from the closing price of May 8.

Motilal Oswal, however, has a neutral stance on the stock with a target price of ₹1,930, meaning it expects the stock to decline more than 3%.

The brokerage highlighted that the automaker’s management has indicated that FY25 is likely to be an exciting year for new launches. In EVs, it plans to launch multiple variants of iQube with various battery options to suit consumer needs. It also plans to launch other EV models, including its much awaited 3W EV.

“Volume growth is likely to be driven by a recovery in the domestic 2W market, healthy demand for its products (Raider, 125CC scooters and iQube) and new product launches. We expect TVS Motor to continue to work on improving its profitability and factor in 90 basis points expansion in EBITDA margin over FY24-26,” the analyst said.

The brokerages’ commentary comes after the firm reported an over 18% year-on-year jump in net profit to ₹485.4 crore in the January-March quarter of the financial year 2023–24. Its fourth-quarter revenue rose nearly 24% YoY to ₹8,168.8 crore. The margin for the quarter under review came in at 11.3%, as against 10.3% during the fourth quarter of last year.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Hero MotoCorp is the top Nifty 50 gainer after Q4 results, analysts expect nearly 25% more rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hero MotoCorp shares rallied nearly 6% in early trade on May 9, a day after the two-wheeler maker reported its results for the January to March 2024 quarter. The two-wheeler maker’s stock became the top Nifty 50 following Q4 results, which were largely in line with CNBC-TV18 poll projections.

Hero MotoCorp shares trade 5.8% higher at ₹4,881.35 on NSE at 9:49 am. In the past year, the stock increased investors’ wealth by 86% as against the benchmark Nifty 50 which has risen 22% during the period. It has also outperformed the sectoral index Nifty Auto which has gone up 66% in the one-year period.

Analysts expect further upside in the stock as the company’s management has guided for double-digit revenue growth in the current fiscal.

Global brokerage Jefferies has a buy call on the stock with a target price of ₹5,650, implying a potential upside of more than 23%. It said it continues to like the company and it believes the two-wheeler segment is poised for double-digit growth over the next three years.

The brokerage, however, noted that Hero MotoCorp’s market share has declined in the segment and that adverse demand profile shifts are concerns.

According to the analyst, if there is any success in premium bikes, scooters and electric vehicles (EVs) can enhance growth. It sees a 17% earnings per share (EPS) compound annual growth rate (CAGR) over FY24-26.

CLSA, meanwhile, pointed out that a reduction in raw material costs led to an 89 basis points improvement in gross margin quarter-on-quarter.

It explained that the EBITDA margin for the petrol two-wheeler segment stood at 15.6% whereas the EV business dragged the margin down by 130 bps in Q4.

Also Read: Hero MotoCorp to launch Xoom 125 cc and Xoom 160 cc scooters ahead of festive season

Motilal Oswal, meanwhile has set the target price at ₹5,320, indicating a potential upside of 15%. It also highlighted management’s commentary that despite fewer wedding dates in May-June 2024, overall sentiment remains positive across rural and urban areas.

For the premium segment, the two-wheeler maker aims to increase the capacity to 10,000 units per month for the 440CC platform and Karizma put together in the next couple of months, it said.

EV scooter model launches such as Xoom 125CC and 160CC are scheduled for 1HFY25. The management believes that most of the white spaces would be filled after these launches, it added.

Thursday’s share price gains come after Hero MotoCorp reported an over 18% jump in net profit on a year-on-year (YoY) basis to ₹1,016 crore in the January-March quarter. Its revenue surged 14.6% in Q4FY24 to ₹9,519.3 crore, beating poll estimates.

Hero MotoCorp’s earnings before interest, taxes, depreciation, and amortization or EBIDTA margin for the quarter came in at 14.3%, reflecting an improvement of 130 bps on a YoY basis, driven by product mix, lower commodity costs, higher savings, and judicious price increases, the firm said.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mahindra and Mahindra shares get an upgrade as analyst sees SUV 3XO as a game changer

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mahindra and Mahindra shares have the potential to surge 15% (from the closing price of April 30), said brokerage firm DAM Capital Advisors and upgraded its rating on the stock to ‘buy.’

M&M shares surged almost 2% to ₹2,204 to hit an all-time high during the day on the NSE. The stock was among the top five Nifty 50 gainers and also outperformed the sectoral index Nifty Auto which traded 1.12% higher.

In the past year, the stock has given a return of 77% to its investors as against the benchmark Nifty 50 which has risen 25% during the period. The market capitalisation of M&M has now hit ₹2.73 lakh crore.

DAM Capital Advisors, meanwhile, has set the target price at ₹2,550 for M&M shares as it believes the carmaker’s stellar SUV performance and tractor recovery warrant valuation expansion.

The brokerage commentary comes days after M&M unveiled its compact sports utility vehicle (SUV) XUV 3XO, which the brokerage believes will be a major game changer for the company.

Mahindra’s XUV 3XO is a facelift of the XUV300 with prices starting from ₹7.49 lakh (ex-showroom). The new model, available in five trims, features a significantly revamped design, a new cabin, an array of added features and an updated automatic gearbox.

Also Read: M&M ED and CEO shares EV plans, says ready to compete with anyone amid Tesla entry news

M&M Executive Director and CEO for auto and farm Rajesh Jejurikar also told CNBC-TV18, “3XO is a disruptor product. We tried to excel in every dimension… XUV 3XO comes with many segment-first features and aggressive pricing.”

The Street also seems to have liked the pricing of the facelift vehicle, which is quite competitive pricing across variants ranges from ₹7 lakh to ₹15 lakh.

Meanwhile, M&M also announced on May 2 that its overall auto sales, including exports, for April 2024 have risen 13% year-on-year to 70,471 vehicles.

In the utility vehicles segment, Mahindra sold 41,008 vehicles in the domestic market, a growth of 18% and overall, 41,542 vehicles, including exports. The domestic sales for commercial vehicles stood at 22,102.

DAM Capital expects the company to sell more than 8,000 vehicles every month, which it believes would be a stable volume and would drive its SUV growth to 20% in FY25.

The brokerage expects a volume compound annual growth rate (CAGR) Of 10% over FY24-FY26 as against industry growth of 6-7%.

It said that M&M’s operating scale and better mix would drive earnings before interest, taxes, depreciation, and amortization or EBITDA margin expansion of 100 basis points from the current level to 13.8% in FY26. Tractor rebound and better pricing would also drive EBITDA margin expansion, it added.

M&M shares traded almost 2% higher at ₹2,197.50 on NSE at 1:08 pm.

Track latest stock market updates on CNBCTV18.com’s blog here

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Maruti Suzuki will have to offer more discounts, says analyst after Q4 results miss estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Maruti Suzuki shares were in focus on April 29, after India’s largest passenger carmaker reported earnings for the January to March 2024 quarter that fell short of CNBC-TV18 poll projections on various parameters.

Brokerage firms Nomura and Kotak Institutional Equities have neutral and sell calls on the stock, respectively, with target prices below the last closing price on April 26. However, HSBC and Motilal Oswal have given the stock a buy rating and see a potential upside of 10% and 16%, respectively.

Maruti market share at risk?

Despite the divided stance in terms of ratings and target price, all analysts have highlighted that Maruti Suzuki is likely to witness a decline in market share over FY25-26.

In March 2024, Maruti retained its top spot with a lion’s share of 39.33% in the passenger vehicles segment compared to 40.48% in the year-ago period, according to Federation of Automobile Dealers Associations of India (FADA) data. At the end of FY24, its share stood at 40.66%, down from 40.94% in FY23.

Nomura is of the view that the market share may face risk in FY25-26. Kotak says its market share may decline to 40.5-41% over the financial year owing to newer launches by competitors.

Will Maruti offer more discounts?

Nomura also believes discounts at Maruti will likely rise as inventory has filled up. In its report for March, FADA also pointed out that the downturn in the PV segment was influenced by heavy discounting and selective financing further affected by economic worries and the electoral climate.

(As sales slow down, automakers often offer discounts and other offers to lure buyers.)

In a brokerage note on automobiles, Motilal Oswal pointed out, “Entry-level demand continues to face pressure for Maruti Suzuki, with discounts remaining consistent on a MoM basis. There are no discounts on Maruti’s Brezza/Ertiga and Tata Motors’ Nexon. The waiting period continues to remain under two months for M&M XUV700 and ScorpioN. Inventory for all the key PV OEMs stood at 40-45 days.”

Also Read: Maruti Suzuki declares dividend of ₹125 per share, the highest-ever in its history

Motilal Oswal also noted that Maruti’s operating performance in the fourth quarter of FY24 was below its estimates as benefits from operating leverage (140bp) and lower discounts (80bp) were partially offset by one-off costs (60bp).

Reflecting on demand, Maruti’s management said, its enquiries are growing in high-single digits.

What will drive growth in FY25?

– Improved mix
– GST cuts or favourable policy for hybrids

Kotak expects the volume trajectory for the industry to remain muted over FY25 due to weakness in the entry-level segment’s demand and receding order book in the SUV segment.

However, HSBC sees FY25 growth at 5-6% largely driven by CNG and exports. It also added that a cut in taxes on hybrids is an upside risk.

Even as Maruti reported an EBITDA margin of 12.2% for the quarter, 120 basis points below expectations of 13.4%, due to higher ad spends and higher manufacturing overheads, HSBC says its FY25/26 expectations remain unchanged.

It also said that post-run-up, the stock will likely be rangebound in the near term but the brokerage’s medium-term outlook remains positive.

Motilal Oswal marginally raised its FY25-26 estimates by 2-4% for Maruti, noting that it expects the carmaker to continue to outperform industry growth in the current fiscal. While the bulk of input cost benefits are likely to be behind, MO expects Maruti to post about 70bp margin improvement to 12.5% in FY25, largely led by an improved mix.

“This would, in turn, drive a steady 13% earnings CAGR over FY24-26E. Any GST cuts or favourable policy for hybrids by the government may drive a rerating as Maruti would be the key beneficiary of such changes,” it added.

The firm’s multi-tech approach seems best-suited for India, it further said.

Maruti Suzuki shares traded flat at ₹12,737.10 on NSE at 9:59 am. 

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

HSBC’s Asia strategist outlines key reasons for bright investment prospects in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Herald Van Der Linde, Head of Asia Equity Strategy at HSBC, views India’s current economic phase as reflective of broader growth trends, similar to that seen in China during the early and mid-2000s. “And that’s just an indication of where India is at the moment in the cycle.”

Linde points out that India boasts multiple unique growth drivers across sectors such as consumption, automotive, and technology upgrades, suggesting a significant structural economic expansion. “I think there’s multiple growth drivers in India at the moment. And that is fairly unique.”

The strength in earnings of key companies such as Reliance Industries is just a reflection of that and gives investors even more confidence than they already had in the Indian growth story, he said.

On April 22, Reliance Industries (RIL) reported a strong operational performance for the January to March quarter 2024 (Q4FY24).

All business segments for RIL reported growth during the quarter.

Revenue grew 11% for the quarter over last year, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 14% from the year-ago period.

Also Read | Reliance Industries shares may go up to ₹3,479, say analysts after strong Q4 results

Linde also noted that some of India’s growth is due to improvements in the banking sector’s balance sheets.

This has had a positive impact for a few years now, but it may slow down eventually. However, this isn’t a major immediate concern.

Also Read | Reliance Industries results: Q4 profit jumps 10% sequentially, annual revenue crosses ₹10 lakh crore

“The issue is does the global macro is ever going to help India or Asian equities in general. And for the moment, they are a little bit on shaky ground this week,” he added.

For the entire interview, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bajaj Auto expects to grow faster than the industry as it nears entering Europe

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pune-based Bajaj Auto on Friday, April 19, said that if the industry grows at 7-8%, they expect their growth to be even higher, possibly in double digits, based on their past performance.

“We would certainly be driving for double-digit growth,” Bajaj Auto’s ED Rakesh Sharma told CNBC-TV18 a day after they reported the company’s earnings for the March quarter.

The company declared its Q4FY24 results wherein standalone net profit jumped 35.1% on a year-on-year (YoY) basis to ₹1,936 crore in the January-March quarter. A CNBC-TV18 poll had expected the quarterly profit to come at ₹1,870 crore. The performance came on the back of higher volumes, an increased share of high-margin products, price hikes and lower input costs. The company also declared a dividend of 800% per share for its shareholders.

Also Read | Bajaj Auto Q4 results: Net profit jumps 35% to ₹1,936 crore; auto major declares dividend of ₹80 per share

On their entry into the European market, Sharma mentioned that they will also be focusing on some other new markets, although these won’t have a major impact right away. One of these markets is Brazil, where their new plant will start operating in May. The move is expected to meet the demand that has been waiting and help them extend their reach. Additionally, they are also entering the Venezuelan market and making their debut in Europe.

“So, hopefully by the second half, or let’s say at least the last quarter of the financial year will start to show some impact,” he said.

Bajaj Auto’s better-than-estimated results for the quarter have compelled at least three global analysts to raise their target prices on the auto major’s stock.

Jefferies has raised its target price on Bajaj Auto shares to ₹10,500 with a ‘buy’ call. The brokerage expects a 16% upside from the closing price of the stock on April 18. It has also raised its FY25–26 earnings per share (EPS) estimate by 4%.

Also Read | Bajaj Auto strong Q4 show gets the company three target price hikes — Should you buy?

CLSA, too, raised its target price on the stock to ₹6,889 but retained its ‘sell’ rating. The target price still implies a 23% downside from Thursday’s closing price. It believes the stock is overvalued following the recent rally.

Global brokerage Citi has a ‘sell’ call on the stock but has raised the target price to ₹6,500. It noted that the management’s commentary was positive on domestic two-wheelers demand whereas exports recovery is likely to be more gradual.

The market capitalisation of Bajaj Auto is around Rs 2,43,407.06 crore. Its shares have gained close to 104% in the past year.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bajaj Auto strong Q4 show gets the company three target price hikes — Should you buy?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bajaj Auto’s better-than-estimated results for the January to March 2024 quarter have compelled at least three global analysts to raise their target prices on the auto major’s stock. However, not all of them have given it a buy rating.

The increase in target price comes as the analysts expect the Pune-based two- and three-wheeler maker to gain market share in the domestic motorcycle segment in the 2024-25 financial year. Exports recovery, on the other hand, is expected gradually.

Jefferies has raised its target price on Bajaj Auto shares to ₹10,500 with a ‘buy’ call. The brokerage expects a 16% upside from the closing price of the stock on April 18. It has also raised its FY25-26 earnings per share (EPS) estimate by 4%.

The brokerage said it continues to like the company as it expects rising Indian two-wheeler demand. It added that cyclical recovery in exports should drive 17% volume CAGR over FY2024-26.

Bajaj Auto has risen to the number three position in the electric two-wheelers space and is expanding its portfolio, Jefferies pointed out.

CLSA, too, raised its target price on the stock to ₹6,889 but retained its ‘sell’ rating. The target price still implies a 23% downside from Thursday’s closing price. It believes the stock is overvalued following the recent rally.

The brokerage expects the firm to gain market share in the domestic motorcycle segment in FY25 aided by new launches. Additionally, it expects export volumes to increase at a mid-single-digit rate.

Global brokerage Citi also has a ‘sell’ call on the stock but has raised the target price to ₹6,500. It noted that the management’s commentary was positive on domestic two-wheelers demand whereas exports recovery is likely to be more gradual.

The management also noted that there could be some disruption in electric two-wheelers’ demand on reduction in subsidy while three-wheeler demand growth should moderate in FY25 compared to FY24 levels. The focus is on gaining market share in 125cc+ bikes aided by new model launches, Citi said.

Bajaj Auto shares traded 2.25% lower at ₹8,815.30 on BSE at 9:18 am. In the past six months, the stock has made investors 62% richer compared to a 9.5% rise in the benchmark Sensex.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bajaj Auto Q4 results preview: Strong domestic volumes and exports recovery to ride a smooth March quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bajaj Auto is set to report a strong January to March 2024 quarter on April 18 with margin expected to expand on the back of lower inputs costs alongside strong volume growth and pick up in export business.

Bajaj Auto shares will be in focus as the two and three-wheeler maker is expected to report its quarterly results around noon. The stock has increased investors’ wealth by more than 110% in the past year as against benchmark Sensex which has risen 22% during the period. In the six months, the shares have gone up 74% compared to a 10% surge in Sensex for the period.

Earlier this month, the stock hit a record high of ₹9,356 on April 2.

According to a CNBC-TV18 poll of analysts, the company might report strong earnings for the last quarter of the 2023-24 fiscal year with 24% revenue growth and a stable margin at 20%.

Also Read: Bajaj Auto eyes high double-digit growth for Triumph

The revenue is likely to come in ₹11,118 crore for the quarter under review compared to ₹8,904 crore in the year-ago quarter. The EBITDA or earnings before interest, taxes, depreciation, and amortisation could increase 28.8% to ₹2,211 crore in the March 2024 ended quarter as against ₹1,716 crore in the corresponding quarter a year ago.

Bajaj Auto’s operating margin shall increase from 19.3% in the March 2023 ended quarter to 19.8% in the same quarter of FY24. The margin expansion shall be led by lower input costs, improved mix and operating leverage benefits, analysts said.

The profit after tax (PAT) shall rise 30% year-on-year to ₹1,870 crore.

Among key factors to track include total volumes that are likely to have gone up 24% YoY at 10.69 lakh vs 8.60 lakh units. The company has witnessed strong domestic volume growth of 28% YoY whereas export volume growth has recovered at more than 19% YoY. On a sequential basis, the firm’s improved three-wheeler performance has also pushed the stock higher.

Also Read: Bajaj Auto sees 25% jump in sales in March, expects continued exports recovery in FY25

Meanwhile, the demand trends in the African and South Asian regions have also improved though on a lower base.

Global brokerage Goldman Sachs recently raised its target price on Bajaj Auto stock to ₹9,380 from ₹8,780 earlier.

Bajaj Auto shares closed almost a percent lower at ₹8,911 on NSE on April 16.

Also Read: Bajaj Auto may launch its biggest Pulsar ever on May 3

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Morgan Stanley raises target price on Maruti, expects stock to rally more than ₹1,400

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Maruti Suzuki share price has the potential to rally more than 11% or ₹1,472.85 higher than its closing price on April 8, global brokerage Morgan Stanley said in a note.

With an overweight call, the brokerage has raised the target price on the stock to ₹14,322. The stock was trading 0.38% higher at ₹12,898 on BSE at 10:39 am. In the past year, the stock of India’s largest carmaker has increased investors’ wealth by more than 50%, as against benchmark Sensex which has risen 25% during the period.

In March 2024, Maruti Suzuki sold a total of 1.87 lakh units whereas for the full fiscal 2023-24, it reported record sales of 2 million with the highest ever domestic sales as well as exports.

The numbers and brokerage commentary come at a time when sales of electric vehicles (EVs) have slumped with Tesla selling 9% fewer EVs in the January to March 2024 quarter.

Reflecting on this, Morgan Stanley said that the global slowdown in EVs shows that the powertrain strategy which Maruti Suzuki has is best to navigate the landscape.

Hybrids are seen as an attractive bridge in the EV transition globally, the brokerage noted, adding that the hybrid takeoff in India has been slow but this could change.

Any risks for Maruti? Morgan Stanley believes that if the market gets highly competitive in the SUV segment and first-time buyers (FTBs) do not return, market share losses could cause de-rating.

Track latest stock market updates on CNBCTV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow