Home / Markets / Stock Markets /  Multibagger bluechip stock turns 1 lakh to 53 lakh in long run: Buy?

A bluechip company with a market valuation of Rs. 2,82,260.59 Crore in the auto industry is Maruti Suzuki India Ltd. One of India's top automobile manufacturers, Maruti Suzuki (MSIL) has a market share of over 50% and is the country's top manufacturer of automobiles. Japanese company Suzuki Motor Corporation (Suzuki) holds a 56% stake in the company. One stock that has provided enormous multibagger returns over the long haul is Maruti Suzuki. Let's investigate how the stock accelerated a one lakh rupee investment to 53 lakh rupees in 19 years.

Share price history of Maruti Suzuki India Ltd

Maruti Suzuki India's shares ended the trading day on Friday at 9,320.00 a piece, down 0.87% from the previous close of 9,401.85. Compared to the 20-Day average volume of 621,810 shares, the stock saw a total volume of 574,213 shares on Friday. From 173.35 on July 11th, 2003, to the present market price, the stock price has soared tremendously, registering a multibagger return and an all-time high of 5,276.41%. Therefore, if you had invested Rs. 1 lakh in the company 19 years ago, you would have received a return on investment of Rs. 53.76 lakh today. 

In the last 5 years, the stock has gained 16.82% and in the last 3 years, the stock has gained 35.45%. In the last 1 year, the stock has gained 25.89% and on a YTD basis, the stock has surged 23.87% so far in 2022. On the NSE, the stock had touched a 52-week-high of 9,451.00 on (23-September-2022) and a 52-week-low of 6,536.55 on (08-March-2022), indicating that after making a fresh high on Friday the stock is currently trading 42.58% above the low. 

At the closing price on Friday, the stock was seen trading above the 5 days, 10 days, 20 days, 50 days, 100 days and 200 days Simple Moving Average (SMA). The RSI indicator value for Maruti Suzuki India Limited (MARUTI) as of 23/09/2022 is 64.9, indicating that the stock is neither in an overbought nor oversold zone.

Should you buy the stock?

The research analysts of the broking firm Edelweiss Wealth Research have recommended to buy the stock for a target price of 10332. On Friday, the analysts said in a research report that “We expect +40,000 per month volume for both the recently launched SUV models, as compared to consensus of around 30,000 to 33,000. Market share can move up by 200-300 bps in next 12-18 months driven by its unchallenged franchise. Margins are likely to surprise in FY24E due to higher ASP, it can be around 12% EBITDA margin as per our expectations."

However, the risks for future price performance of Maruti could be slowdown in economy, volatility in raw material prices and rise in competitive intensity, as per the analysts.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

 

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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