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Maruti Suzuki share gains over 2.5% on rise in September sales

Maruti Suzuki share price trades higher than 5, 50, 100 and 200 day moving averages but lower than 20-day moving averages

twitter-logoBusinessToday.In | October 1, 2020 | Updated 17:29 IST
Maruti Suzuki share gains over 2.5% on rise in September sales
Maruti stock price has risen 7.83% in the last 5 days of consecutive gains

Maruti Suzuki shares gained 2.5% intraday in Thursday's trading session after the automaker informed the exchanges that it has recorded a 30.8% growth in wholesale numbers for September on a yearly basis.

Maruti Suzuki India's overall wholesale numbers (domestic + other OEMs + export) grew an impressive 30.8% to 1,60,442 units in September 2020 from 1,22,640 units in September 2019.

The country's largest passenger vehicle manufacturer reported a 33.4% YoY growth in domestic sales to 1,50,040 units in September 2020 as against 1,12,500 units in the year-ago month. Maruti's exports also increased by 9% YoY to 7,834 units during the month under consideration.

Following the press release update, Maruti Suzuki share price touched an intraday high of Rs 6,906, rising 2.43% on BSE, as against the last closing value of Rs 6,742. The stock also touched an intraday low of Rs 6,774, after opening at Rs 6,828.

Maruti stock price has risen 7.83% in the last 5 days of consecutive gains.  

Maruti Suzuki share price trades higher than 5, 50, 100 and 200 day moving averages but lower than 20-day moving averages.

"Sales performance in the first half has to be seen in conjunction with COVID-19 related disruptions," the filing said.

"The Company remains committed to the health, safety and well-being of all members across the value chain. All production and sales operations continue to take place fully consistent with all safety requirements for employees and customers," it added.

On Maruti's sales numbers, Jyoti Roy - DVP- Equity Strategist, Angel Broking said, "Maruti Suzuki reported better than expected sales numbers for the month of September 2020. Domestic sales growth was driven by the entry-level mini and compact segments which reported growth of by 35.7% YoY and 47.3% YoY respectively driven by the increased preference for personalized transportation post-Covid-19. While monthly sales numbers are expected to stabilize going forward, the low base of last year is helping growth numbers will go away from October and hence growth rates are expected to moderate from September very high level."

Meanwhile, Brokerage Macquarie maintained Outperform rating on Maruti with a Price target of Rs 7,800 nad said,"Subscription program is NPV negative as compared to purchase, but offers lower upfront outgo, no resale risk and higher flexibility. Expect adoption to remain low in the near-term. Concerns over the ICE resale value and a change in mindset can drive penetration in the medium-term. Plans to roll out the subscription program to 40-60 cities over the next 2-3 years. Recovery in PV sales, strong new launches in UVs and margin recovery are key catalyst. We remain positive on PV recovery, further supported by strong replacement demand."

Maruti shares closed 0.76% higher at Rs 6,794.05 on BSE today.

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