Bluechip Auto Stock Focussing On Top SUV Segment, Buy Stock With Rs. 10270 Target Price: Top Brokerage

Maruti Suzuki has launched Brezza in the compact SUV segment and Grand Vitara in the Mid-SUV segment, with a strong focus on the SUV segment which is expected to boost the company's sales further. Axis Securities, a top brokerage firm has recommended buying the stock of Maruti Suzuki India.

Stock To Buy: Target Price

The Current Market Price (CMP) of Maruti Suzuki India (MSIL) is around Rs. 8,828. Axis Securities has estimated a Target Price for the stock at Rs. 10,270. This stock has the potential to give a 16% return, in the upcoming 1 year. It is a large-cap stock with a market capitalization of around Rs. 262,330 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 8,828
Target Price	Rs. 10,270
Potential 1 year return	16.00%
52 week high share price	Rs. 9,451
52 week low share price	Rs. 6,536.55

Exports outlook of Maruti Suzuki

The company reported its highest ever export volume of 69.5k units in Q1FY23 and management expects to sustain the run rate going forward in FY23. The exponential growth in exports was led by the large network presence of parent company Suzuki, along with an improved product mix.

Stock Upside - outlook and value

According to Axis Securities, "Looking at the existing order book we expect the company's volumes to witness strong growth H2FY23 onwards. We expect a recovery of both market share and margins in FY23 and FY24, led by a favorable product life-cycle, operating leverage, and product mix as well as price action/cost-cutting. We maintain our Buy rating on the stock with a target price of Rs. 10,270 valuing the stock at 28x its FY24E EPS."

Recent launches and demands

MSIL has a stronghold in the entry-Level segment and with recent launches, in the compact (All-New Brezza) & mid SUV (Grand Vitara) segment it seems to be moving towards regaining lost market share by FY25E. The brokerage firm expects a rise in demand from new launches along with the upgradation of the existing product portfolio, softening commodity inflation, and improving ECU shortages to support recovery in the margins.

Company Portfolio

Maruti Suzuki India Ltd (MSIL) is the market leader in the domestic passenger car industry commanding a market share of about 45%. Suzuki Motor Corporation (SMC) currently holds 56.37% of its equity stake. The Company has two state-of-the-art manufacturing facilities located in Gurugram and Manesar in Haryana, capable of producing ~1.5 Mn units per annum.

Disclaimer

The above stock was picked from the brokerage report of Axis Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.