India’s largest automaker Maruti Suzuki’s stock value for the first time in company’s history had crossed Rs 9000 mark on Friday when Maruti’s stock hit a record high of Rs 9,119.95 (52-week high) and in two working days the price of the stock has gone by over Rs 200 with today’s high being Rs 218. Strong positive domestic growth bundled with positive sentiments in equity markets are the key reasons for the sudden upward momentum of Maruti Suzuki’s stock price.During the first half of this ongoing financial year stood at Rs 3,857 crore, recording a growth of 19.5% over the same period last year. Maruti Suzuki’s net profit stood at Rs 4,040 crore. R C Bhargava, Chairman, Maruti Suzuki said that while the operating profit increased by 16%, the net profit increased by 3.8% due to lower non-operating income as the yields on investment were lower compared to last year and some impact of commodities and additional advertisement expenses and increase in effective tax rates.
The second quarter (July-September 2017) has been a successful quarter for the company as it sold 492,118 units at a growth of 17.6% over the same period last year. In the domestic market, the company sold 4,57,401 units and also saw the success on new Maruti Suzuki Dzire, Maruti Suzuki Vitara Brezza SUV and Maruti Suzuki Baleno with strong demand. R C Bhargava said that GST has not affected the doing of business and the consumer demand has not been affected.
Maruti Suzuki shares are also currently the most valued performing auto stock in the world behind Elon Musk’s Tesla. Experts do believe that the positive trend of the stock will continue till the end of this financial year and also next year. The company will be launching its new 2018 Maruti Suzuki Swift at the 2018 Auto Expo and is expected to add to the overall profitability during FY 2018-19. With a global partnership of Suzuki –Toyota to develop electric car in place, India is likely to be the first country to be benefiting from this venture.
Fresh investments in Gujarat by Suzuki to setup a lithium-ion battery plant which will be ready by 2020 has also been a factor showcasing the company’s aggressive plan for future. Maruti’s share have jumped over 53% so far this year behind Tesla’s 70.20% in the same period. Maruti Suzuki is also the 11th largest automaker in the world with a market value of over $38.4 billion says a report on Bloomberg.
