Maruti shares: Will Maruti shares hit 5-digit figure after Q2? Here’s what brokerages say

NEW DELHI: After India’s largest car maker managed to surprise the Street with a four-fold rise in net profit in the September quarter, Dalal Street expects the stock to rally as high as Rs 12,500.

The stock, which hit a fresh 52-week high of Rs 9,768.65 today, is up over 26% in the last six months amid easing of semiconductor chip shortage issues and strong demand outlook.

Among foreign brokerages, Jefferies has raised its target price on

to Rs 12,000, while Citi sees the stock at Rs 12,500. JPMorgan, on the other hand, has a neutral rating on the stock with a target price of Rs 8,700. For CLSA, the auto stock is a sell with a target price of Rs 7,597.

For domestic brokerage firm

, Maruti remains its top pick in the auto sector with a target price of Rs 11,250.

“Strong demand and a favorable product lifecycle for MSIL augur well for market share and margin. We expect a recovery in both market share and margin in 2HFY23, led by an improvement in supplies, a favorable product lifecycle and mix, RM and currency-related benefits, and operating leverage,” it said.

Kotak Institutional Equities, which has maintained a sell rating on the stock with an unchanged face value of Rs 8,150, said the company’s EBITDA of Rs 27.7 billion fell 12% below its estimate due to lower-than-expected gross margins and higher ad spends on account of new launches.

“However, we expect EBITDA margin to remain below 12% in FY2024-25E as we expect discounts to inch up, especially in the entry-level segment. In addition, we believe it will be challenging for the company to cross 45% market share,” it said.
also downgraded the stock to add rating, saying there is limited scope for earnings upgrades.

On the other hand, Sharekhan expects

to post earnings growth of 64.3% CAGR during FY2022-FY2024E, driven by a 21.2% revenue CAGR and a 470-bps improvement in EBITDA margin.

“Buoyant rural demand and success of new launches would be key growth drivers for the company. Pending orders from customers remain high at 4.1 lakh units, led by strong demand and ESU supply constraints, which are easing,” it said while coming out with a target price of Rs 10,965.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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