Moneycontrol
Dec 08, 2017 11:35 AM IST | Source: Moneycontrol.com

Maruti Suzuki crosses Rs 9000-mark for first time, surges 71% in 2017

The share price has crossed the milestone of Rs 9,000 for the first time on Friday, hitting a record high of Rs 9,119.95. It was also partly boosted by positive sentiment in equity markets.

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It has been a great year, so far, for Maruti Suzuki India as value buying due to better monthly sales growth and corporate earnings despite demonetisation & GST effects helped the stock register 71 percent growth in 2017.

The share price has crossed the milestone of Rs 9,000 for the first time on Friday, hitting a record high of Rs 9,119.95. It was also partly boosted by positive sentiment in equity markets.

The stock today gained 2.7 percent intraday, in addition to 3.3 percent rally in previous session.

The recent monthly sales numbers were in line with analyst expectations. The country's largest car maker sold 1.54 lakh units during the month, higher by 14.1 percent over 1.35 lakh units sold in November 2016. The growth was largely driven by domestic sales that grew by 15 percent year-on-year.

Maruti continued to get good response for its Vitara Brezza, Ignis, Baleno, Ertiga etc.

Last week, global brokerage house CLSA hiked its target price for the stock to Rs 10,000 per share while maintaining a buy call.

"Valuations seem rich, but justified given high earnings visibility and improving outlook," the research house said, adding India passenger vehicle industry is showing signs of easing competitive intensity.

Easing competitive intensity, in small cars and entry sedans, is positive for Maruti, CLSA feels. According to the research house, Maruti is likely to broaden its sports utility vehicle portfolio in coming years, though competition is high.

The announcement of tie-up for electric vehicles last month also boosted sentiment. Toyota Motor and Suzuki Motor agreed to cooperate in selling electric vehicles in India from around 2020, they had said November 19, aiming to give each other a leg up in emerging markets and low-emission technology.

While having a buy rating with a target price of Rs 9,843 per share, the brokerage on November 19 said that Maruti-Toyota MoU for electric vehicles is a positive for original equiopment manufacturers (OEMs) as they would have a head-start over other OEMs in India.

At 11:02 hours IST, the stock price was quoting at Rs 9,085.45, up Rs 204.35, or 2.30 percent on the BSE.
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