Nuvama Institutional Equities maintained its ‘Buy’ rating on Maruti Suzuki post the launch of eVitara, the company’s first EV. The brokerage has a target price of Rs 14,300 on the stock, implying a downside of 2.8%. However, it is to be noted that the auto major’s stock price has hit a fresh 52-week high of Rs 14,895 on August 28.
Nuvama on Maruti Suzuki: Raising SMG plant capacity
SMG plant capacity of 0.75 million is being expanded to 1 million in FY27, with the new line being fungible across powertrains. It is highly automated with IoT (Internet of Things) 4.0 technology, yielding world-class quality and low warranty costs, notably lower than peers.
IoT is a network of connected devices (sensors, machines, vehicles, appliances, etc.) that communicate and exchange data over the internet. IoT 4.0 means using smart connected devices and sensors to collect, analyse, and act on data in real-time within industrial and business ecosystems.
Nuvama on Maruti Suzuki: eVitara to be profitable at EBIT level
eVitara is being rolled out at SMG at an investment of Rs 2,200 crore, and shall be sold in 100-plus countries that include Europe, Japan, and India. Maruti Suzuki has planned to produce 70,000-plus units in the first 12 months. “The EV will be sold overseas on a cost-plus basis, and hence shall be profitable at EBIT level, even without factoring in PLI benefits,” said Nuvama.
Suzuki group company TDSG has invested Rs 4,270 crore. The company has a capacity of 18 million cells for hybrids, which is being expanded to 30 million cells, highlighting the focus on hybrids.
TDSG is a group company of Suzuki (Toshiba Denso Suzuki Group) that manufactures lithium-ion batteries for EVs and hybrid cars in India. It has a battery manufacturing plant in Gujarat. TDSG Company is a joint venture between Toshiba Corporation (Japan), Denso Corporation (Japan), and Suzuki Motor Corporation (Japan).
Maruti Suzuki’s stock performance
The share price of Maruti Suzuki has risen 4% in the last five trading sessions. The stock has given a return of 20% in the past one month and 24% in the last six months. Maruti Suzuki’s share price has surged 32% year to date.
