Maruti Suzuki zooms 6%, sees sharpest intra-day gain in 2 yrs; details here

The UP govt move to waive registration fee on hybrid cars led to substantial decline in on-road price of strong hybrids in the state to the tune of around 10% and is expected to accerlerte sales.

Maruti Suzuki in focus: Shares of Maruti Suzuki India (MSIL) rallied as much as 5.9 per cent to Rs 12,735 on the BSE in Tuesday’s intra-day trade amid heavy volumes after the Uttar Pradesh (UP) government decided to waive registration fee on hybrid cars in a bid to promote green technology.

The stock of automobile major has reported its sharpest intra-day rally in the last two years. On June 23, 2022, MSIL surged 6.9 per cent in intra-day trade. The stock hit a record high of Rs 13,066.85, on April 24, 2024.

At 11:19 AM, MSIL was trading 5.8 per cent higher at Rs 12,725, as compared to 0.36 per cent rise in the BSE Sensex. The average trading volumes on the counter more than doubled with a combined 0.94 million shares changed hands on the NSE and BSE.

As per media sources, UP government has clubbed strong hybrid with electric vehicles (EVs), thereby extending zero registration benefits to strong hybrids being sold in the state. The move is anticipated to invigorate sales of these vehicles in the state, which is among the largest EV markets in India.

According to automobile industry sources, the on-road prices of strong hybrid cars have decreased by up to Rs 4 lakh in UP after the state government move. Around 100 strong hybrid cars were sold per month in Uttar Pradesh in FY24, Business Standard reported. READ MORE

This has led to substantial decline in on-road price of strong hybrids in the state to the tune of around 10 per cent, and is expected to accerlerte its sales going forward, ICICI Securities said in a note.

MSIL will be the biggest beneficiary of this move. UP as state clocks 2nd highest passenger vehicle (PV) sales volume domestically with its share in total sales volume pegged at around 10 per cent, the brokerage firm added.

MSIL is the market leader in the domestic passenger vehicle (PV) space with market share pegged at approximately 41.7 per cent as of FY24. The popular models include WagonR, Swift, Brezza, Baleno, Ertiga and Fronx among others.

Meanwhile, analysts at Prabhudas Lilladher said they prefer MSIL in the PV space given the increased penetration of utility vehicles (UVs) in domestic as well as international markets, consistent double-digit growth in the UV category, margin improvement opportunity (from operating leverage, cost reduction, and superior mix),  high presence in hybrid technology, and revival in rural demand and small cars category.

Additionally, MSIL plans to launch its first electric vehicle (EV) model in FY25, which shall increase its product offerings in different powertrains, the brokerage firm said in Q1FY25 earning preview with ‘Buy’ rating on MSIL and target price of Rs 14,432.