Investment: What Should Investors Do Now As Maruti Suzuki’s Q3 Profit Soars 130%?
Maruti Suzuki Q3: Total operational revenue was Rs 29,057.5 crore, up 24.96 percent from Rs 23,253.3 crore in the same quarter last year.
Maruti Suzuki India shares will be closely watched on January 25, the day after the company reports its December earnings.
On January 24, the country’s largest automaker reported a 129.55 percent increase in consolidated net profit for the quarter that ended December 2022 at Rs 2,391.5 crore, up from Rs 1,041.8 crore in the same quarter last year.
Maruti Suzuki said in a stock exchange filing that total revenue from operations was Rs 29,057.5 crore, up 24.96 percent from Rs 23,253.3 crore in the same quarter last year.
Here are the opinions of brokerages concerning the stock and the business following the December quarter earnings.
LKP Analysis
The brokerage has kept its ‘Buy’ rating on the stock and has a rolled-over target price of Rs 10,298.
Due to an improved product mix, higher average selling prices (ASPs), lower input costs, and higher utilization rates, the company reported a strong margin performance for the quarter.
The company is prepared for future healthy growth thanks to its ability to counter competition from the EV shift and better growth in rural markets severely affected by COVID Wave #2.
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CLSA
The brokerage house maintained its “Sell” rating on the stock and increased its target price to Rs 8,240 per share as earnings exceeded expectations thanks to a richer product mix and lower costs.
The new model cycle has helped the bookings stay strong.
According to CNBC-TV18, CLSA expects the company to increase its market share in the SUV segment due to recent product launches, but only modestly over the next two years.
Citi
The stock still has a “Buy” rating from the research firm, and the target price has been increased to Rs 13,100 per share.
Better pricing and an improving mix helped realizations and gross margin, which allowed the third quarter to surpass estimates.
The management hopes that its two new models, the Fronx and Jimny, will help it take the lead in the SUV market.
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Morgan Stanley
The stock is still rated ‘Overweight’ by brokerage firms, with a price target of Rs 10,483 per share.
The Q3 EBIT margin was the highest in 17 quarters and exceeded expectations.
Expect improving mix, leverage gains, and lower discount to drive earnings incrementally, and the company’s market share to rise to 43% in FY24 versus 41% in FY23, according to CNBC-TV18.
According to CNBC-TV18, a brokerage house increased its EBIT and earnings projections for FY23 to FY25 by ten to twelve percent and nine to sixteen percent, respectively.
Nomura
The brokerage firm has kept its rating on the stock as “Neutral,” with a target price of Rs 9,928.
While EBITDA’s margin was in line, Q3 revenue outperformed due to the stronger ASPs. While weaker mass segments continue to be of concern, the new SUV ramp key is positive.
The future is bright, and the company has goals ahead of industry growth and SUV leadership.
For Q4, the cost outlook is stable, and higher margins are anticipated.
The margin may be impacted by rising A&P spending, a stronger yen, and regulatory costs, according to CNBC-TV18.
Jefferies
The stock continues to have a ‘Buy’ rating from the research firm, with a target price of Rs 11,250 per share.
Better realizations drove the Q3 EBITDA’s 5% increase over expectations.
The company expressed optimism about demand because it has 2.5 months of orders and low channel inventories.
According to CNBC-TV18, the demand, product, and margin cycles are favorable, leading to a quadrupling of EPS throughout FY22 to FY25.
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