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KR Choksey has issued a 'BUY' rating for Maruti Suzuki India, setting a target price of Rs 13,407. The company reported a slight decline in vehicle sales and a drop in PAT due to tax provisions, but expects improved rural demand and growth in exports and hybrid vehicles to enhance long-term margins.
US stock indexes closed lower as chip stocks fell, with the Dow down 91.51 points, the S&P 500 down 19.25 points, and the Nasdaq down 104.82 points. GIFT Nifty indicates a weak start for Indian markets, with a projected loss of 98 points. The Nifty 50 has been consolidating between 24,100 and 24,500, while recent trading saw the Sensex drop 426.85 points amid selling in banking, metal, and IT sectors.
Discounts on popular SUVs like Mahindra Thar, XUV 7OO, Kia Seltos, and Toyota Fortuner are being offered to boost sales during the festive season, with reductions reaching several lakhs. Increased production has led to higher availability, prompting carmakers to provide discounts across various models. Utility vehicles accounted for nearly 65% of total passenger vehicle sales from April to September 2024, with a notable rise in UV sales despite a decline in passenger car sales.
Rural demand in India has recently surged, primarily driven by increased borrowing, but concerns linger over urban demand and economic conditions. Maruti Suzuki's Chairman highlighted a decline in sales of sub-Rs 10 lakh cars due to stagnant incomes and rising fuel prices, while Nestle's MD noted sluggish growth in the FMCG sector, with food and beverage growth dropping to 1.5-2%. The RBI is urged to consider a rate cut as demand across major sectors moderates.
UBS Group AG reported a third-quarter net income of $1.4 billion, significantly surpassing analyst expectations of $783.3 million, driven by strong lending income and cost reductions. However, the bank cautioned about potential challenges from the US elections and declining interest income, while also navigating the integration of Credit Suisse amid regulatory uncertainties that could increase capital requirements by up to $25 billion. UBS plans to continue share buybacks and is considering acquiring a US wealth management firm post-integration.
Suzuki's Indian unit will supply its first electric vehicle to Toyota, marking a new collaboration in green technology between the two automakers. Production is set to begin in spring 2025 at Maruti Suzuki's Gujarat plant. Following the announcement, Maruti shares rose nearly 3%.
Benchmark indices Nifty and Sensex traded lower on October 30, with the Sensex down 133.56 points at 80,235.47 and the Nifty down 28.00 points at 24,438.80, as investors took profits following a recent rally. Bank and pharma stocks contributed to the decline, while Maruti Suzuki, Wipro, and IndusInd Bank emerged as top gainers. The broader market showed mixed results, with midcap stocks falling 0.2 percent and smallcap stocks rising nearly 1 percent, amid concerns over high valuations. The India VIX increased by 3 percent, reflecting heightened market anxiety.
Maruti Suzuki's Q2FY25 standalone revenue saw a slight increase of 0.4% YoY, primarily due to a 2.6% rise in average selling prices, despite a 1.9% decline in volume. The company's gross margin contracted by 130bps YoY, leading to a 17.4% drop in PAT, influenced by rising commodity prices and increased promotional expenses. While the outlook for FY25 appears challenging, the long-term prospects remain positive due to a diverse product range, revival in rural demand, and growth in the export market, prompting a "BUY" rating with a target price of Rs 14,586.
Maruti Suzuki India has exceeded expectations in its Q2 FY25 results, despite facing challenges, with a 2% decline in volume. The strong performance is attributed to improved realisations and a rich product mix, while the export market remains robust amid a slowdown in the domestic sector. Valuations are considered reasonable, suggesting a long-term accumulation of the stock.
Maruti Suzuki's Q2 FY25 earnings have raised concerns among brokerages, with shares plummeting 18% in the past month. The company reported a 17% year-on-year decline in net profit to Rs 3,103 crore, missing analyst expectations, while revenue slightly increased to Rs 37,449 crore. A deferred tax liability of Rs 1,018 crore, influenced by regulatory changes, impacted profitability, leading to cautious outlooks on the stock's future.
Maruti Suzuki India Limited
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Maruti Suzuki India receives buy rating with target price of 13407 rupees
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