Buy This Large Cap Auto Stock For 11% Potential Gains: Edelweiss Wealth Research

Edelweiss Wealth Research has rated "buy" Maruti Suzuki India Ltd. in its pick of the week - Fundamental Research report. The brokerage estimated a target price of Rs 10,322 apiece. According to the given target price, the stock is likely to surge by 11%. Maruti Suzuki is a large cap Auto sector company having a market cap of Rs 2,82,247 crore.

Business Overview

Maruti Suzuki (MSIL) is India's largest passenger vehicle (PV) manufacturer with market share of about 50%. It is a key player in the mini and compact cars segment with a dominant market share and has enjoyed success in the executive segment on the back of the Ciaz and Brezza launches. Suzuki Motor Corporation (Suzuki) of Japan holds a 56% stake in the company. MSIL offers the widest product range in passenger cars in India with particular focus on the entry segment.

 

Stock Outlook-CMP, 52 Week Low & High

The current market price of Maruti Suzuki stock is Rs 9,323.45 on NSE. The 52-week low is Rs 6,536.55 and the 52-week high is Rs 9,451, which was recorded on 23 September 2022. On intraday the stock's low is Rs 9,277.35 and the high is Rs 9,451.

Investment Returns

It gave 1.67% in the week, while in the past 1 month, it gave 7.14%. In the past 1 year, it gave 36.47% positive return. Over the past 3 and 5 years, it gave 35.45% and 15.81% positive returns, respectively.

Key highlights

According to the Edelweiss Wealth Research, the key highlights are of the MSIL. are as follows:

• We expect +40,000 per month volume for both the recently launched SUV models, as compared to consensus of around 30,000 to 33,000.
• Market share can move up by 200-300 bps in next 12-18 months driven by its unchallenged franchise.
• Margins are likely to surprise in FY24E due to higher ASP, it can be around 12% EBITDA margin as per our expectations.

 

Risks

According to the brokerage, the key risks are:
• Slowdown in economy
• Volatility in raw material prices
• Rise in competitive intensity

Disclaimer

The stock has been picked from the brokerage report of Edelweiss Wealth Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.