Maruki Suzuki shares gained 6.27 percent on hopes of improved outlook
Published On: Thursday, June 23, 2022 | By: Team KnowMyStock
Shares of Maruti Suzuki India (MSIL) hit an over three-month high of Rs 8,308, surging 6.27 percent on the BSE in Thursday's intra-day trade, on hopes of margin improvement due to stable commodities prices. The stock was trading at its highest level since 2 March 2022 and has surged 25 percent from its 52-week low of Rs 6,540 touched in March this year. In a separate development, the company on Monday, June 20, opened bookings for the country's new version of the compact SUV Brezza. On the fundamental side, Singh said that the company is looking at ramping up production in FY23, to surpass an output of 2 million, its highest ever in a year. “Sustaining above the 8200 mark is crucial, then the stock has a potential to rally towards 8500-8700 in the short-term,” he added.
MSIL's profitability has been adversely impacted in the last three years by a weak product lifecycle, unprecedented commodity cost inflation in base commodities and precious metals, and multiple headwinds to volumes, resulting in an operating deleverage.Motilal Oswal Financial Services, in a report last week, said that Maruti Suzuki’s product pipeline has just kick-started with upgrades of key models and it is on the cusp of launching new models. It added that ahile return of product life cycle will drive market share recovery, strong demand, improving supplies and stable commodity prices will propel EBIT margin improvement. The research and brokerage firm has given a ‘buy’ rating to the stock, with a price target of Rs 10,000, which implies 22 per cent upside potential from current levels.
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