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Jefferies revs up Maruti Suzuki shares with rating upgrade

Jefferies expects earnings to more than treble over FY22-24 adding that passenger vehicle demand is already strong.

June 16, 2022 / 10:04 AM IST
Maruti Suzuki, Maruti Suzuki stock, Maruti Suzuki share

Maruti Suzuki, Maruti Suzuki stock, Maruti Suzuki share

 
 
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Maruti Suzuki India share price rose 2 percent in morning session on June 16 after Jefferies upgraded the stock to buy.

The global research firm has set target at Rs 10,250 per share, an upside of 28 percent. The brokerage expects earnings to more than treble over FY22-24 adding that passenger vehicle demand is already strong.

"Replacement cycle with preference for personal mobility should provide a boost. Falling metal prices should help margin improve from a historical low," it said.

At 09:47 am, the stock was trading at Rs 8,012.60, up Rs 159.85 or 2.04 percent. It has touched an intraday high of Rs 8,025 and an intraday low of Rs 7,924.70.

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Recently, Motilal Oswal Securities maintained a buy rating on the stock with a target price of Rs 10,000. UBS also has maintained a buy rating and kept a target price of Rs 10,000. Credit Suisse has maintained an outperform rating with a target price of Rs 10,103 while Nomura Research has a neutral rating with a target of Rs 8,627.

According to Motilal Oswal, Maruti Suzuki's product pipeline has just kick-started with upgrades of key models and it is on the cusp of launching several new models starting September. "On the other hand, product pipeline of other OEMs (original equipment makers) is peaking out with bulk of new model launches behind us," it said.

While return of product lifecycle will drive market share recovery (600 basis points by FY24 end), strong demand, improving supplies and stable commodity prices will propel operating profit margin improvement of 550 basis points for Maruti, the brokerage had said.

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first published: Jun 16, 2022 10:04 am
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