Buy Maruti Suzuki: target of Rs 9000: Sharekhan
Sharekhan is bullish on Maruti Suzuki has recommended buy rating on the stock with a target price of Rs 9000 in its research report dated January 12, 2021.
January 14, 2021 / 09:04 PM IST
Sharekhan's research report on Maruti Suzuki
We maintain our Buy rating on Maruti Suzuki Limited (MSL) with a revised PT of Rs. 9,000, factoring better multiples owing to resilient near-term outlook, structural growth outlook, healthy cash flow generation, and return ratios. MSL is likely to be the beneficiary of buoyant demand in the passenger vehicle (PV) segment, driven by rising demand in tier 2 and 3 cities and rural areas. MSL is expected to sustain its dominant market share, aided by its strong product portfolio and positioning, brand appeal, and ability to launch new models frequently. We expect MSL’s earnings to grow strongly by 44.5% and 19.5% in FY2022E and FY2023E, respectively, driven by 20.7% revenue CAGR (FY2021E-FY2023E) and 300 bps improvement in EBITDA margin. The stock is valued at P/E multiple of 25.8x and EV/EBITDA multiple of 17.4x its FY2023 estimates.
We have revised our PT to Rs. 9,000. We maintain our Buy rating on the stock.
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