Maruti Suzuki shares have multiplied wealth by more than 14 times in last 10 years; should you buy?

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Updated: November 23, 2018 4:26:52 PM

While investors maybe scouting for opportunities to invest in bluechip stocks, a Sensex scrip, which ranks among the most consistent stocks in the last 10 years is attractive at current levels, according to a report. We take a closer look.

In its latest wealth creation report, Motilal Oswal noted that Maruti Suzuki has created wealth to the tune of Rs 2,308 billion in the last 5 year period.

While investors maybe scouting for opportunities to invest in bluechip stocks, India’s largest automaker Maruti Suzuki, which ranks among the most consistent stocks, is attractive at current levels, according to a report. Notably, Maruti Suzuki shares, currently selling for Rs 7,461 on NSE, has multiplied wealth by more than 14 times in the last 10 years. In its latest wealth creation report, Motilal Oswal noted that Maruti Suzuki has created wealth to the tune of Rs 2,308 billion in the last 5 year period. Notably, Maruti Suzuki also ranks among the ‘most consistent wealth creators’ with a 10-year price CAGR of 27%.

In its India Strategy and Earnings review report, Motilal Oswal noted that Maruti Suzuki shares price has corrected by about 27% from its 52-week high of Rs 10,000. Accordingly, the research and brokerage firm has named Maruti Suzuki among its preferred picks in the large cap space. Motilal Oswal has a share price target of Rs 8,484. The target share price implies an upside of about 14% from the current price levels. The automaker has reported a net profit of Rs  2,240 crore, down by 9.8% on year.

Also read: RIL, HDFC stocks at huge discount: Motilal Oswal’s top 10 large-cap picks that could give up to 50% returns

The decline is the profits was mainly caused by adverse foreign exchange as well as adverse commodity prices seen in the quarter. Net Sales for the car-maker came in at 21,551.9 crore, implying a 0.5% rise as compared to the same period previous fiscal. Sales volumes have seen a decline of 1.5% to 4,84,848 vehicles in the latest quarter.

In December last year, Nilesh Shah of Kotak MF said that the world’s best performing automobile stock is in India. In an interview to CNBC TV18, Nilesh Shah, Managing Director of Kotak AMC said that in his recent visit to Japan, he used the Indian car manufacturer Maruti Suzuki’s rise to explain the country’s potential.

“I carried just one chart with me, and said, I can explain India in hundred slides or I can explain India in one slide. I compared Maruti Suzuki India‘s performance with Honda, Toyota, Nissan, General Motors, Ford and all the listed companies, and said that look, the world’s best performing automobile stock is in the Indian market, and this is how Suzuki has made money in India. Surprisingly, they were not aware of this story and they all lapped it up,” he told CNBC TV18.

Disclaimer: Views and recommendations given in this section are the brokerage firms’ own and do not represent those of www.financialexpress.com. Please consult your financial adviser before taking any position in the stock (s) mentioned.

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