In a remarkable achievement, shares of Maruti Suzuki India, the country’s largest carmaker, rose to an all-time high, crossing the ₹12,000 per share mark for the first time in today’s trading session to set a new record high of ₹12,025 per a gain of 3.7%. This increase represents the fourth consecutive day of gains for the stock.
In the year to date, the company’s shares have registered a remarkable increase of 16%, outperforming the Nifty Auto index, which has registered a 9.80% increase during the same period. Notably, it took the stock 24 trading sessions to surpass the significant ₹12,000 milestone, following its ascent beyond the ₹11,000 mark on February 14.
Today’s rally came after global brokerage firm CLSA stated in its recent note that the company is likely to benefit from the rise in CNG vehicles. The brokerage forecasts indicate a significant increase in the share of CNG passenger vehicles, expected to climb from 15% in fiscal year 2024 to 22% by fiscal year 2030.
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This anticipated increase is attributed to the lower operating costs of CNG vehicles compared to their Internal Combustion Engine (ICE) counterparts. CLSA predicts that Maruti Suzuki will maintain its dominance in the CNG segment, commanding an impressive 72% market share.
Recent analysis shows that CNG prices are approximately 50% lower than gasoline and 22% lower than diesel, strengthening the appeal of CNG vehicles in the current market landscape. In recent years, India has taken significant steps towards promoting green mobility, with the government actively managing CNG prices as part of this initiative.
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“With a renewed focus on fuel-efficient models such as CNG/hybrid and a strong line-up for SUVs despite short-term weakness in the hatchback segment, we expect Maruti Suzuki’s performance to be driven by, reshaping the SUV-driven portfolio. , visibility on EV entry in FY25, and consolidation of SMG. We believe the Greenfield plant in Kharkhoda, Gujarat, and an additional EV line in SMG will create synergy and help the company secure 4 million capacity by FY2030-31,” said domestic. brokerage firm Centrum Broking in its latest note.
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The brokerage remains bullish on the company’s operating performance and has maintained its ‘buy’ rating on the stock with a target price of ₹15,082 each.
In February, Maruti Suzuki reported a remarkable 14.6% year-on-year increase in sales volume, reaching 197,491 units. Export figures increased by an impressive 68.1% year-on-year, reaching the highest monthly volume ever recorded at 28,927 units in February 2024.
Domestically, sales reached 168,544 units, marking an 8.7% increase. The SUV segment experienced substantial growth, with volumes increasing by 82.5% to reach 61,234 units, supported by a robust SUV lineup, aggressive marketing initiatives, and the reintroduction of the Brezza in hybrid form.
Despite a decrease of 15.1% in volumes, the Mini & Compact segment remained important, contributing 51.1% to domestic sales, although affected by weak rural sentiments.
Disclaimer: The opinions and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 20 Mar 2024, 14:24 IST