Maruti Suzuki Shares Hit New 52-Week High, Crosses Rs 10k Mark Again; Racing For Rs 11,000 Mark?

Auto giant Maruti Suzuki witnessed a fruitful buying on Thursday as the stock gained and rallied to cross more than the Rs 10,000 mark. The stock has hit a new 52-week high. The impressive gains in Maruti come ahead of the festive season. But investors are also cheering on Maruti's growth plan ahead. Firstly, Maruti has roped in Arnab Roy, as the new Chief Financial Officer, while secondly, it plans a stock split to make it easily affordable for retail investors. And last but not least, the company is aiming to double its production with an investment of a whopping Rs 45,000 crore.

All these factors have worked in favour of Maruti shares.

On BSE, Maruti stock ended at Rs 9981.05 apiece, up by Rs 216.65 or 2.22% on Thursday. Earlier, in the day, the stock touched a new 52-week high of Rs 10,064.80. Overall, the stock zoomed over 3% in a single-day.

This led to a significant rise in its market cap to over Rs 3.01 lakh crore.

Year-to-date, Maruti's stock price have advanced by Rs 1,574.40 or 18.73% on BSE.

The stock is expected to touch the Rs 11,000 mark as well following these developments.

One of the major developments in Maruti is the appointment of Arnab Roy as CFO with effect from October 16, 2023. The present CFO, Ajay Seth will be superannuating from the post with effect from December 31 and will continue to be a member of the executive board.

With over 26 years of experience with the US, British and French MNCs in all aspects of financial and accounts, Arbab is a seasoned professional. During his career, he has successfully handled Mergers & acquisitions and other growth initiatives like Contract Manufacturing, licensing, working with investment bankers on potential acquisition opportunities etc. He has been involved in analysing value chains, designing distributor footprints, evaluating channel partners and deciding on optimum channel
strategy.

Arnab since January 2022, has been serving as Zone Chief Financial Officer for Greater India Region covering all Schneider businesses with a business span of around 22,000 crores ($3 billion). He serves as Director in around 12+ Schneider Companies including a listed entity from a governance standpoint and leads a Finance Team of around 200+ people in the Greater India Region plus shared services.

Apart from this, Maruti's Chairman R C Bhargava told shareholders in the company's 42nd annual general meeting (AGM) that they estimate the cost to be about Rs 45,000 crore for an additional capacity of 2 million cars. He added that this investment is likely to double annual production capacity to 4 million units over the next eight years.

Further, the chairman decided to take up the recommendation for a stock split of Maruti shares by the shareholders. He accepted that the stock spit would certainly increase the ability of people to trade in Maruti shares.

Also, the chairman highlighted that for the Maruti 3.0 plan, there needs to be a reorganisation and focus on different powertrains such as electric vehicles, hybrid vehicles, compressed natural gas (CNG), and ethanol.

Talking about Maruti shares, Himanshu Singh - Research Analyst, Prabhudas Lilladher said, "The appointment of Mr. Arnab Roy as the new CFO with his diverse and extensive experience with an impressive professional journey spanning 25 years, is a positive development for Maruti, in our view. His vast experience and expertise in managing operations of large multinational corporations will be crucial in steering Maruti Suzuki towards a path of sustained growth and success as it seeks to strengthen its position in the evolving automotive landscape."

Singh has given a 'Buy' recommendation on Maruti shares for a target price of Rs 11,000.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, znor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.