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Maruti Suzuki Shares Rises 4% Despite Q2 Numbers Miss Estimates; Buy, Sell Or Hold? – News18

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Maruti Suzuki Shares Rises 4% Despite Q2 Numbers Miss Estimates; Buy, Sell Or Hold? – News18


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Maruti reported a 17% decline in standalone net profit for the September quarter, coming in at Rs 3,069 crore; Should you invest?

Maruti Suzuki (File photo)

Shares of Maruti Suzuki rose 4 per cent to a day’s high of Rs 11,455.75 on the BSE today, rebounding after a nearly 4 per cent drop the previous day following disappointing Q2 results.

The carmaker reported a 17 per cent decline in standalone net profit for the September quarter, coming in at Rs 3,069 crore.

The profit was below Street estimates of Rs 3,525 crore.

The company’s revenue from operations during the quarter stood at Rs 37,203 crore, a marginal increase of 0.37 per cent compared to Rs 37,062 crore in the corresponding quarter of the previous financial year. The revenue also fell short of Street estimates of Rs 37,322 crore.

The company sold a total of 541,550 vehicles during the quarter, comprising 463,834 vehicles in the domestic market and 77,716 vehicles for export. While domestic volume declined by 3.9 per cent, export volume grew by 12.1 per cent compared to the same period last year.

Brokerages have also flagged demand concerns for entry-level cars.

Analysts said the auto major is in a cyclical drag and that growing average selling price (AP) will be the key revenue driver for Maruti Suzuki going ahead in the wake of moderating volumes.

A recovery in the small car segment could provide additional thrust to growth, analysts said as they find Maruti Suzuki’s stock valuations inexpensive and reasonable for a fresh entry. A handful of brokerages have target prices in the range of Rs 12,000-Rs 14,800 for the stock. The scrip closed at Rs 11,010 level on Tuesday.

MSIL, Nirmal Bang said, posted the highest ever ASP of Rs 6,87,000 per vehicle in Q2, largely led by improving product mix. Over the last 2 years, ASPs have gone up by 19 per cent. Nirmal Bang believes the trend will continue led by increasing share of SUVs, exports and limited edition vehicles in the entry segment.

Small car sales, where MSIL holds 71 per cent market share, has been severely impacted over past 5 years. FY24 volumes were 60 per cent lower than the FY18 peak. Any recovery in the segment will give an additional thrust to volume growth, Nirmal Bang said.

“At the CMP the stock trades at 19x Sept’26 EPS; we believe it’s a very lucrative entry point and maintain MSIL our top BUY in the OEM segment,” it said while suggesting a target price of Rs 14,550.

Emkay Global has upgraded the MSIL stock to ‘Add’ from ‘Reduce’ with an unchanged target price of Rs 12,000, given the potential catalysts and inexpensive valuations at 25 times core September 2026 EPS.

“While we continue to believe that the near-term PV outlook is muted, we note few potential catalysts for MSIL: a) bottoming out of volume decline in key entry-level models, b) 7-seater SUV launch (H2FY26E), c) EV launch (Q4FY25E), and d) optionality of small car recovery,” the brokerage said.

This brokerage has cut its FY25 EPS estimate by 8 per cent and FY26-FY27 EPS estimates by 5 per cent and 3 per cent on lower margins.

Nuvama said the festive season growth for Maruti Suzuki is likely at 14 per cent, supported by strong UV sales and better rural demand. It noted that the FY25 retail growth guidance is 3–4 per cent.

“We forecast a revenue/Ebitda CAGR of 10 per cent/11 per cent over FY24–27E led by robust growth in SUVs and moderate growth in cars. The launch of E-SUV (eVX model) and gradual recovery in hatchbacks demand should catalyse volumes. We retain ‘BUY’ with a target price of Rs 13,800 (Rs 14,600 earlier) based on 27 times September 2026 core EPS plus cash of Rs 2,360 per share,” Nuvama said.

Nomura India suggested a target price of Rs 12,455 for Maruti Suzuki. The brokerage was concerned about sustainability of margins, given tougher demand conditions post Q1. “But the sharp drop in margins surprised us despite the higher SUV mix. We believe festive growth has been supported by discounts and may not reflect underlying demand improving,” Nomura India said. It remained neutral on MSIL and preferred Mahindra & Mahindra Ltd.

UBS has reportedly cut the target price to Rs 14,800 from Rs 15,200. Investec has cut its target price to Rs 12,385 from Rs 14,030.

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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