Maruti Suzuki shares gain 3%. Should you buy post Q3 results?

Shares of Maruti Suzuki India (MSIL) jumped 3% to hit the day's high of Rs 10,500 on the NSE after a couple of top brokerages reiterated their buy views on the company following its December quarter earnings on Wednesday. While Jefferies called its Q3 show strong, it flagged moderation in the country's passenger vehicle growth. Nuvama vouched for robust SUV growth and near-term growth visibility.

The stock has gained over 5% since the announcement of its results.

India's largest passenger carmaker on Wednesday reported over 33% jump in its consolidated net profit for the quarter ended December 2023 at Rs 3,206.8 crore vs Rs 2,406.1 crore reported in the year-ago period. Revenue for the quarter came in at Rs 33,512.8 crore vs Rs 29,251.1 crore a year ago, registering a 14.5% YoY growth.


Read more: Maruti Suzuki Q3 Results: Cons profit zooms 33% YoY to Rs 3,207 crore; revenue jumps 15%

Here's what brokerages recommended:

Jefferies: Buy | Target: Rs 12,000

Jefferies reiterated its buy view on Maruti for a price target of Rs 12,000 estimating an 18% upside over the Wednesday closing price of Rs 10,183.30.

MSIL's 3Q EBITDA rose 38% YoY but was 5% below Jefferies estimates while PAT's growth was in line. "After a strong 27% YoY growth in FY23, India's PV industry growth has moderated to just 7% in 9MFY24, and we estimate a similar 7% growth in FY25. As per MSIL, the industry association also expects modest low-single-digit volume growth in FY25," Jefferies said in a stock review. MSIL's PV market share is holding up in the 40-42% range and sustainability is key, it said.

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Nuvama: Buy | Target: Rs 12,500

Nuvama has recommended a buy view on the stock with an unchanged price target of Rs 12,500 helped by a strong December quarter with the outlook remaining intact. Furthermore, better net pricing and scale are expected to boost profitability, driving a PAT CAGR of 23%, it added.

On its earnings, Nuvama said that MSIL posted strong Q3FY24 EBITDA/PAT growth with the outperformance driven by lower input prices/royalty and higher other income.

"We are raising FY24E/25E EPS by 8/4% on higher GM and other income assumptions. Going ahead, we forecast a revenue CAGR of 12% led by moderate growth in cars and robust growth in SUVs on the back of successful launches. Order book stands at 215,000 units, providing near-term visibility," Nuvama said.

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