Thursday, August 18, 2022
HomeBusinessBuy Maruti Suzuki: Opportunity to earn in Maruti Suzuki, due to these...

Buy Maruti Suzuki: Opportunity to earn in Maruti Suzuki, due to these reasons the stock may rise – News

Margins for Maruti Suzuki are expected to improve going forward on strong demand, improving chip supply, moderation in commodity inflation and favorable conditions.

Maruti Suzuki Stock Price: The stock of auto company Maruti Suzuki has been in the range for the last few months. Talk about this year or last 1 year, the stock has been seen trading in a range. But brokerage house Motilal Oswal expects a good rally in this going forward. The brokerage house says that for the last 3 years, there has been pressure on the profit of the stock due to many reasons, but the negative factors are now ending. The company’s business is expected to further strengthen due to strong demand, improving pitch supply, softening commodity, strong product pipeline, innovation, new launches and focus on existing markets. Investors will get the benefit of business growth in the form of a rise in the stock.

Market share and margin improvement

Brokerage house Motilal Oswal says that Maruti Suzuki’s margins are expected to improve going forward due to strong demand, already improving chip supply, mild moderation in commodity inflation and favorable conditions. The brokerage says that during FY22-24E, the company’s market share is expected to recover by 600bp and margin by 550bp. Due to this, there can be 66 percent CAGR growth in the company’s EPS during this period. The brokerage house has given a target of Rs 10,000 while retaining the buy advice in the stock. In terms of current price of Rs 7811, it can give excellent returns of 28 percent.

Product pipeline strong

The brokerage house says that Maruti Suzuki has a strong product pipeline and the company’s focus is on continuous innovation. The company is continuously upgrading its models. At the same time, many new models are going to be launched in the coming days. Demand is good in the passenger vehicle segment. The data from inquiry to booking is strong. Hope it gets better going forward. Apart from further strengthening its portfolio, the company is expanding its network in existing markets. At the same time, the focus remains on adding new markets.

Negative factors are ending

The profits of Maruti Suzuki had been under pressure in the last 3 years due to some reasons. For example, week product life cycle, commodity cost inflation, lockdown due to Kovid 19 and semiconductor shortage. But now all these negative factors are slowly disappearing. Chip supply has already improved. There is a recovery in business after Kovid 19, there is a slight softening in commodity prices. In such a situation, profits are expected to be better going forward.

(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of digitnews. Markets are risky, so take expert opinion before investing.)

Html code here! Replace this with any non empty raw html code and that's it.


Most Popular