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Maruti Suzuki top BSE Sensex gainer, soar 5%; should you buy or hold as analysts see up to 22% rally

Maruti Suzuki India share price rallied 5.3 per cent to Rs 8,196 apiece on BSE, hitting a three month high on Thursday.

Maruti Suzuki, BSE Sensex, Maruti Suzuki share price
MSIL’s profitability has largely been affected by inflation, commodity prices, semiconductor shortage, weak demand and multiple headwinds resulting in weak operating margins. Image: Reuters

Maruti Suzuki India share price rallied 5.3 per cent to Rs 8,196 apiece on BSE, hitting a three month high on Thursday. The stock was trading at its highest level since 2 March 2022, and has surged 25 per cent from its 52-week low of Rs 6,540 touched in March this year. Analysts say that with today’s rally, the stock has come out of a consolidation zone of 8000-8080. “Technically the stock appears to have formed a strong support base around the 7400-7500 zone,” Aamar Deo Singh, Head Advisory, Angel Broking, told FinancialExpress.com.

On the fundamental side, Singh said that the company is looking at ramping up production in FY23, to surpass an output of 2 million, its highest ever in a year. “Sustaining above the 8200 mark is crucial, then the stock has a potential to rally towards 8500-8700 in the short-term,” he added.

Motilal Oswal Financial Services, in a report last week, said that Maruti Suzuki’s product pipeline has just kick-started with upgrades of key models and it is on the cusp of launching new models. It added that ahile return of product life cycle will drive market share recovery, strong demand, improving supplies and stable commodity prices will propel EBIT margin improvement. The research and brokerage firm has given a ‘buy’ rating to the stock, with a price target of Rs 10,000, which implies 22 per cent upside potential from current levels. It added that Strong demand, improving chip supplies, moderating commodity inflation and favorable Fx would support margin recovery.

MSIL’s profitability has largely been affected by inflation, commodity prices, semiconductor shortage, weak demand and multiple headwinds resulting in weak operating margins, Ravi Singh, VP & Head of Research, Share India Securities, told FinancialExpress.com. “On hope of improvement in supplies and commodity prices, Maruti Suzuki share price is outperforming the index. The stock is having a support near 8000 levels which seems to be sustainable for a further target of 8350 levels in near term,” he added.

Lower metal prices and decent price correction in crude oil have led to positivity in the auto sector including Maruti Suzuki India, Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com. “Technically, 8100 remains a strong resistance both on Daily and Weekly charts. Investors should look to accumulate this stock only on dips near 7600-7700 for higher targets of 9200 in the coming months,” Shetty added.

Akhilesh Jat, Category Manager – Equity Research, CapitalVia Research, told FinancialExpress.com that the surge in Maruti Suzuki stock price was seen ahead of the strong demand for its cars and rupee appreciation against the yen that reduced the cost of raw materials. Moreover, the number for PV sales for June month is expected to be quite high.

The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

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