Maruti Suzuki share price gains over 2% after Q4 results; Should you buy, sell or hold the stock?

  • Maruti Suzuki India, the largest passenger car manufacturer in India, reported a net profit of 3,878 crore in Q4FY24, registering a sharp growth of 48% from 2,623 crore in the corresponding period last year.

Ankit Gohel
First Published29 Apr 2024, 09:32 AM IST
Maruti Suzuki India surpassed the annual total sales milestone of 2 million units in FY24.
Maruti Suzuki India surpassed the annual total sales milestone of 2 million units in FY24. (Photo: REUTERS)

Maruti Suzuki share price gained over 2% in early trade on Monday after the company announced strong Q4 results. Maruti Suzuki shares gained as much as 2.2% to 12,966 apiece on the BSE with its market capitalisation surpassing 4 lakh crore.

Maruti Suzuki India, the largest passenger car manufacturer in India, reported a net profit of 3,878 crore in Q4FY24, registering a sharp growth of 48% from 2,623 crore in the corresponding period last year. 

The company’s revenue from operations during the quarter rose 19.3% to 38,235 crore from 32,048 crore, YoY. Maruti Suzuki India surpassed the annual total sales milestone of 2 million units in FY24. Total sales volume during the March quarter increased 13% to 584,031 units from 514,927 units in the year-ago period.

Read here: Maruti Suzuki Q4 Results: Revenue rises 19% YoY led by price hike & annual sales, dividend declared; 5 key highlights

At the operational level, EBITDA rose 40% to 4,685 crore from 3,350 crore, while EBITDA margin improved by 170 basis points (bps) to 12.2%, compared to 10.5 %, YoY.

Most brokerages have increased Maruti Suzuki share price target after the release of Q4 results. Here’s what brokerages have to say about Maruti Suzuki share price and Maruti Suzuki Q4 results.

Motilal Oswal Financial Services

Motilal Oswal Financial Services has marginally raised FY25-26 estimates by 2-4%. It expects the company to continue to outperform industry growth in FY25. While the bulk of input cost benefits are likely to be behind, it expects Maruti Suzuki to post about 70 bps margin improvement to 12.5% in FY25, largely led by an improved mix. This would, in turn, drive a steady 13% earnings CAGR over FY24-26E. 

Any GST cuts or favorable policy for hybrids by the government may drive a rerating as Maruti Suzuki would be the key beneficiary of such changes. The brokerage firm reiterated its ‘Buy’ rating on the stock with a target price of 14,700 per share.

Also Read: BSE share price declines 17% post SEBI directions

Emkay Global Financial Services 

Emkay Global Financial Services continues to believe that amid the softening of the underlying PV industry metrics, volume growth for the space would be limited at a ~4% CAGR over FY24-26E. However, profitability for Maruti Suzuki has been resilient amid improved mix (led by SUVs & CNG), controlled discounts, and healthy operating leverage.

This drives 5% and 4% upgrades in its FY25E and FY26E EPS estimates. The brokerage firm now builds a 5% and 7% volume and EPS CAGR over FY24-26E and retains a ‘Reduce’ rating on the stock. Emkay Global raised the Maruti Suzuki share price target to 11,200 apiece from 10,700 earlier.

Also Read: Yes Bank share price jumps 8% after strong Q4 results 2024. Do you own?

Antique Stock Broking

Antique Stock Broking continues its positive stance on Maruti Suzuki and maintains the stock as its top pick. 

We remain confident of the continuing robust growth in the SUV and CNG segments, which is not only driving market share gains & revenue growth, but also leading to improvement in net pricing. We believe with the improving net pricing and scale of operations there could be an upside risk to profitability, Antique Stock Broking said.

It remains positive on Maruti Suzuki and expects an 8% volume CAGR over FY23–26E, as it believes the company will continue to gain market share. It also expects ASP growth to be led by product mix improvement. It also believes the operating leverage and product mix will also support profitability. 

The brokerage reiterated a ‘Buy’ call and raised Maruti Suzuki share price target to 14,761 from 13,538 earlier.

Also Read: IREDA share price jumps over 10% as it attains 'Navratna status'

Nuvama Institutional Equities

Nuvama Institutional Equities slightly increased FY25E and FY26E EPS estimates by 2% and 1% to 479.1 and 541.9, on lower depreciation and higher other income. Going ahead, it forecasts a revenue CAGR of 11% led by moderate growth in cars and robust growth in SUVs.

It anticipates market share to sustain at 43% over FY24–26E with potential upside if the government reduces GST on hybrid vehicles. Furthermore, better net pricing and scale shall boost profitability, driving a PAT CAGR of 14%. It retained a ‘Buy’ rating and raised the target price to 14,800 per share from 14,300 earlier.

At 9:30 am, Maruti Suzuki share price was trading 1.27% higher at 12,848.00 apiece on the BSE.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:29 Apr 2024, 09:32 AM IST
HomeMarketsStock MarketsMaruti Suzuki share price gains over 2% after Q4 results; Should you buy, sell or hold the stock?

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