Citi expects Maruti Suzuki stock to rally 15% post December sales

Global financial services firm Citi maintained ‘Buy’ rating on Maruti Suzuki stock after the company on Wednesday reported a 3.90 per cent year-on-year (YoY) rise in car sales during December 2019 as higher demand for compact models such as New WagonR offset a slump in small cars.

Citi added that new models and weak base aided volume growth during the month. The brokerage house set a target price of Rs 8,400 for Maruti Suzuki shares, indicating an upside of nearly 15 per cent from current levels.

“The company is best positioned to wade through expected choppiness in demand due to BS VI transition. Its main models are already on BS VI and petrol Brezza should augment company’s dominant position,” Citi said.


In a regulatory filing, Maruti Suzuki said it sold 1,33,296 vehicles (total domestic and exports) in December compared with 1,28,338 vehicles sold in the same month a year back.

It registered a 10.20 per cent YoY growth in total export sales and a 2.4 per cent rise in total domestic sales.

Maruti’s popular models such as Alto, old Wagon R and S-Presso, which are categorised by the company as ‘mini’ cars, saw their sales drop 13.6 per cent to 23,883 pieces. This was offset by a near 27.90 per cent rise in its ‘compact’ category cars such as New WagonR, Swift, Celerio and Dzire to 65,673 units.

Mid-sized Ciaz saw a 62.3 per cent drop in sales to 1,786 units while utility vehicles such as Gypsy and Ertiga posted a 17.7 per cent rise to 23,808 units.

The shares of the company closed 0.18 per cent up at Rs 7,325 on BSE.