For the first time, Maruti Suzuki India shares reached Rs 13,000; where does the stock go from here?

Ahead of the company’s March quarter results on Friday, April 26, Maruti Suzuki India Ltd.’s shares reached the Rs. 13,000 mark for the first time ever during Monday’s trading. The biggest automaker in India now has a market capitalization of over Rs. 4.09 lakh crore.

Maruti Suzuki India’s stock increased by about 2% on Tuesday and reached a new high of Rs 1,3010. Seasonally speaking, the greatest quarter for passenger car players both year over year and quarter over quarter is often the fourth. While demand in other sectors slowed, Motilal Oswal observed that the PV category showed robust growth of 19% YoY and 20% QoQ.

Axis Securities projects a 54.9% YoY increase in profit at Rs 4,064 crore for the March quarter, based on a 20.4% YoY increase in sales at Rs 38,585 crore. It is anticipated that the EBITDA margin would increase to 13.5% from 11.7% in a sequential manner.

“We anticipate a 20.4% YoY rise in total revenue as a result of improved product mix, greater absolute number of SUV sales, and higher overall unit sales. With a larger percentage of SUVs in the product mix, price increases made during the period, and tailwinds related to RM costs, EBITDA may surpass YoY growth in the top line. According to the report, “pricing increases, a richer product mix, favorable forex, and an RM tailwind over the past year should help Ebitda margins improve 300 bps YoY (up 175 bps QoQ).”

According to BNP Paribas’ quarterly evaluation, Maruti Suzuki India should record a 21% YoY increase in sales, propelled by a 13% YoY increase in volume and a higher UV mix. Thanks to improved cost management, a stronger sales mix, and more operational leverage, the company’s EBITDA margin is up 69 bps QoQ and 197 bps YoY to 12.4%.

It stated that there will be close attention paid to any updates regarding the waiting period for current models and order book size, particularly with regard to new launches; demand outlook for FY25; trends in rural and urban demand; cost-control initiatives; industry discounting trends; outlook for commodity prices for FY25; average price hikes for the quarter; and any new information regarding the timeline for the launch of EV models. The brokerage has set a target price for the shares of Rs 12,200.

Strong double-digit EBIT margin sustainability should fuel the upgrade, according to InCred Equities, which has a target price of Rs 12,554 on Maruti Suzuki India shares. However, volume growth recovery and the success of new launches would take time to materialize.