Why are global brokerages bullish on Maruti Suzuki?

According to Zee Business Research, Maruti Suzuki's market share has increased month-on-month since April 2023.

Maruti Suzuki India reported a standalone net profit of Rs 2,485.1 crore for the quarter ended June 2023, image- PTI

In September, five global brokerages—Citi, Jefferies, Morgan Stanley, Bernstein, and JP Morgan—raised their target price on the country's largest carmaker, Maruti Suzuki. The reason for the bullishness can be attributed to an increase in market share and strong management commentary.

According to Zee Business Research, Maruti Suzuki's market share has increased month-on-month since April 2023.

According to FADA, in April, the market share was 38.9 per cent which increased to 42.4 per cent in August.

TRENDING NOW

Month	Market Share (%)
August	42.40%
July	41.40%
June	41.10%
May	39.60%
April	38.90%

Further, research suggests that the company's margins are expected to increase from 9 per cent to 11 per cent year-on-year (YoY) in Q2 FY24 due to a better SUV mix.

The company's management aims to achieve a 33 per cent SUV market share.

It also suggests that the company will outperform its competitors in the festive season with the booking of vehicles like the Fronx, Grand Vitara, Jimmy, and Invicto.

Lastly, the company's management has said that the annual production capacity will be doubled to 40 lakh units in eight years. Export volumes are expected to increase three times to 8,00,000 lakh units by FY31.

What do brokerages suggest for Maruti Suzuki?

Brokerage	Rating	New Target	Old Target
Citi	Buy	13,600	13,200
Jefferies	Buy	12,000	11,500
Morgan Stanley	Overweight	11,963	11,164
Bernstein	Outperform	11,750	10,800
JP Morgan	Neutral	9,200	8,800

How has the company fared in the June quarter?

Maruti Suzuki India reported a standalone net profit of Rs 2,485.1 crore for the quarter ended June 2023, up 145.4 per cent as compared to the corresponding period a year ago.

Maruti Suzuki's revenue from operations came in at Rs 32,326.9 crore for the first quarter of the current financial year, as against Rs 26,499.8 crore for the year-ago quarter, according to a regulatory filing.