Maruti Suzuki gains as foreign brokerage upgrades target price

Maruti Suzuki India rose 1.35% to Rs 2,408.95 at 14:25 IST on BSE after a foreign brokerage maintained buy rating on the stock with a 15% increase in target price to Rs 2,700 per share.

Meanwhile, the BSE Sensex was up 176.87 points, or 0.70%, to 25,367.35.

On BSE, so far 32,000 shares were traded in the counter, compared with an average volume of 55,297 shares in the past one quarter.

The stock hit a high of Rs 2,421 and a low of Rs 2,380.10 so far during the day. The stock hit a record high of Rs 2,505.30 on 26 May 2014. The stock hit a 52-week low of Rs 1,217 on 28 August 2013.

The stock had outperformed the market over the past one month till 16 June 2014, rising 10.33% compared with 4.43% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 36.83% as against Sensex's 15.50% rise.

The large-cap company has an equity capital of Rs 151.04 crore. Face value per share is Rs 5.

According to the brokerage, Maruti Suzuki India has a blue sky scenario with a potential to touch Rs 3,750 per share over two years. The brokerage feels that Maruti is well-placed to benefit from an upturn in domestic four-wheeler demand, particularly in entry-level compact cars which account for 24% and 35% of industry and the car maker's volumes, respectively.

Last month, a foreign brokerage put an aggressive three-year target of Rs 4,500 on the Maruti Suzuki India stock. The foreign brokerage said that the Maruti Suzuki India stock price could double in three years in a bull scenario in which personal vehicle industry volume grows at a compounded annual growth rate of 20% due to pent-up demand should the economic growth pick up.

Maruti Suzuki's total production jumped 20.11% to 1.21 lakh units in May 2014 over May 2013.

The company's total sales rose 19.2% to 1 lakh units in May 2014 over May 2013. Domestic sales rose 16.4% to 90,560 units in May 2014 over May 2013. Exports rose 51.2% to 10,365 units in May 2014 over May 2013.

Maruti Suzuki India's net profit fell 35.5% to Rs 800.05 crore on 9.5% decline in net sales to Rs 11818.13 crore in Q4 March 2014 over Q4 March 2013.

Japanese parent Suzuki Motor Corporation holds 56.21% stake in Maruti Suzuki India (as per the shareholding pattern as on 31 March 2014).

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