Maruti Suzuki shares hit Rs 10,000 mark for first time since 2017, m-cap tops Rs 3 lakh cr level

Shares of Maruti Suzuki hit a record high on Wednesday, with its market capitalisation (m-cap) breaching the Rs 3 lakh crore mark for the first time on BSE, thanks to optimism over recovery in passenger vehicle sales led by recent vehicle launches.

Maruti Suzuki hit a record high of Rs 10,036.70 on BSE earlier today, before closing the day at Rs 9,994.50, up 3.61 per cent. It last scaled the psychological mark of Rs 10,000 on December 20, 2017, as per data compiled with corporate database AceEquity.

Recent new launches, including Jimny and Fronx helped Maruti Suzuki fill the sports utility vehicle or SUV product gap. Grand Vitara emerging as the leader in its segment provides comfort on the management achieving its guidance of SUV sales growing to nearly 5 lakh in FY24F, said analysts.

They expect Maruti Suzuki's profitability to benefit from average selling price (ASP) uptick, drop in commodity prices, and operating leverage.

"With improved production and profitability, after the recent semiconductor shortage, the company’s earnings visibility has enhanced while its stock trades below the 10-year mean P/E level," InCred Equities.

For June, Maruti Suzuki’s has reported 2 per cent jump in volumes at 1,59,000 units for June, with domestic personal vehicle volumes up 8 per cent YoY at 1,33,000 units and exports down 17 per cent YoY at 20,000 units.

"We believe, similar to 2Ws, Maruti focused on reducing entry-level model inventory further in a seasonally weak month, before Jimny retails start and the festive season demand kicks in," said ICICI Securities in a note.

Axis Securities said Maruti Suzuki expects to outpace the industry growth rate led by good order book and new launches.

"A strong order book, higher share of premium SUVs, CNG vehicles in the sales mix to improve ASP in FY24/25; further improved chip supplies and stable commodity prices to drive EBITDA CAGR of 28 per cent from FY23-26E. We maintain our BUY rating on the stock and value it at 28 times PE of its June 2025 EPS (roll forward from FY25 EPS)," Axis Securities said.

Also read: Reliance Industries stock offers favourable risk-reward ahead of AGM, says BofA Securities

Also read: HDFC Bank shares halt 5-day winning run, slip 3% post Q1 updates