Buy Maruti Suzuki., target price Rs 14,300: HDFC Securities

HDFC Securities has a buy call on Maruti Suzuki India with a target price of Rs 14,300. The current market price of Maruti Suzuki India is Rs 11,416.35 . The company, incorporated in 1981, is a Large Cap company with a market cap of Rs 3,51,470.64 crore, operating in the auto sector.

Maruti Suzuki India’s key products/revenue segments include Passenger Cars & Light Duty Utility Vehicles, Spare Parts & Components, Other Operating Revenue, Service Income, Scrap, Rental Income for the year ending 31-Mar-2024.

Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 38972.40 crore, up 5.79 % from last quarter Total Income of Rs 36839.90 crore and up 2.82 % from last year same quarter Total Income of Rs 37902.10 crore. The company has reported net profit after tax of Rs 3055.20 Crore in latest quarter.

Investment Rationale
Maruti Suzuki’s Q2FY25 Adjusted PAT at Rs 36.6 billion surpassed HDFC Securities’ estimates of Rs 35.3 billion on account of forex gains. Sequentially, adverse commodity costs and higher advertising spending impacted gross margin by 130 bps. With sequential growth in volumes, there was a benefit of 30-40bps op leverage on margins. The management alluded to a healthy festive demand, albeit with higher discounts. The Kharkhoda facility is expected to be commissioned by the end of FY25. While the demand in the entry-level car segment is yet to pick up significantly, SUVs continue to drive growth. On the back of its aggressive launch spree over the last few quarters, MSIL continues to be the market leader in the UV segment.

The brokerage maintains BUY with a price target of Rs 14,300.

Promoter/FII Holdings
Promoters held 58.19 per cent stake in the company as of 30-Sep-2024, while FIIs owned 17.68 per cent, DIIs 20.71 per cent.

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