Maruti Suzuki Shares Hit Record High Today; Here's Why

Maruti Suzuki shares reached a record high of Rs 10,720 per piece on BSE on Monday. The stark jump in Maruti Suzuki shares came as a surprise for investors as today there was no market-sensitive announcement or any other major business update by the company.

However, the shares of the auto giant have been on investors' radar lately, thanks to the recent rally in the stock's share price. In 2023, the share price of Maruti Suzuki India Limited has witnessed a remarkable jump and the stock's year-to-date (YTD) performance has seen an impressive return of 26%.

After witnessing a sharp jump in its share price, Maruti Suzuki shares were seen trading 0.66% higher at Rs 10605.70 per share at 1:39 pm IST.

So, the question before investors is why this rally in shares of Maruti Suzuki?

According to market experts, Maruti's remarkable performance can be attributed to the company's strong financials and management's announcement about an increase in market shares during the conference call after the announcement of Q1 results 2023.

The company said that Maruti Suzuki's new launches align with the Government of India's (GoI's) efforts to discourage diesel variants. The management has been focussing on petrol of CNG variants for the last few years while launching new variants in the market. All this had gone down well with the long-term investors.

Attractive valuation:

Another reason behind the bullish trading in Maruti Suzuki shares is that the company's shares are available at attractive valuations which makes the investment in the stock even more promising.

Strong financial health:

Maruti Suzuki's robust financial performance has been one important factor behind its stock's ascent. The company's sound financials have instilled confidence among investors. In August 2023, Maruti Suzuki India Limited sold a total of 189,082 units, which is its highest-ever monthly sales volume. Total sales in the month include domestic sales of 158,678 units, sales to other OEM of 5,790 units, and exports of 24,614 units. In FY 2022-23, the Company's turnover exceeded 1 lakh crore, a feat which is achieved only by a few manufacturing companies in India.

Stock Price Performance:

The last one-year and last three-year returns from the stock have gained up to 13% and 63% respectively. The YTD performance of Maruri Suzuki shares is up 26%.

Brokerage Call:

The Brokerage firm Prabhudas Lilladher has assigned a buy call to Maruti Suzuki shares with a target price of Rs 11,100 per share.Kotak Institutional Equities has given a "sell" call to Maruti Suzuki shares with a target price of Rs 10,535. Meanwhile, in its September 12, 2023 report, Motilal Oswal kept the stock in the "buy" category with a target price of Rs 11,900.