Maruti Suzuki hits all-time high after Q2 show; brokerages raise target to Rs 10,000

NEW DELHI: Shares of Maruti Suzuki (MSIL) climbed over 2 per cent to hit a fresh all-time high in Monday's trade after healthy quarterly numbers by the carmaker. However, the stock shed early gains to end the session slightly higher. Foreign brokerages such as Macquarie, Goldman Sachs JP Morgana and Nomura have all raised their targets for the stock following the good Q2 show.


Source: ET NOW

Following the announcement, the stock gained 0.97 per cent to Rs 8,193.55 on BSE.

Foreign brokerage Nomura India said that the carmaker's Ebitda margin at 16.9 per cent was significantly ahead of 14.3 per cent consensus estimate. It was driven by improved mix, operating leverage and cost reduction.

"Our own dealer checks suggest festive demand is up 15-20 per cent YoY for MSIL, with strong waiting periods across the Baleno (12 weeks), Brezza (18-20 weeks) and Dzire (8-10 weeks) despite ramping production.

Nomura has raised its target price on Maruti to Rs 9,843 from Rs 8,993 post Maruti's Q2 numbers, as it expects MSIL to deliver a 13 per cent volume CAGR, 17 per cent revenue CAGR and 21 per cent EPS CAGR over FY18-20."

Nirmal Bang Securities, which has accumulate rating on the stock said, "Realisation was robust on account of strong sales of models like Swift Dzire, Brezza and Baleno. It is noteworthy that Dzire has continued to remain the best-selling model for two consecutive months, clocking sales of over 30,000 units/month in August and September 2017, while Baleno and Brezza models are not being offered at a discount."

Edelweiss Securities said that the good Q2FY18 performance would warrant a strong upward revision in earnings and it has raised its FY19E EPS by only 4 per cent factoring in the sharp jump in commodity prices.

"Price hikes or lowering of discounts pose upside risks to our earnings. We maintain ‘buy’ with a revised target price of Rs 9,289 (Rs 8,705 earlier).