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Maruti Suzuki stock rises 2% after BofAML raises target price

Maruti Suzuki stock rises 2% after BofAML raises target price

Maruti Suzuki share price rose up to 1.96% to  Rs 7, 274 against the previous close of Rs 7,135.05 on BSE

Share price of Maruti opened at Rs 7,210 today Share price of Maruti opened at Rs 7,210 today

Maruti Suzuki share price rose in early trade today after brokerage BofAML raised target price for the large-cap stock predicting rise in volumes and compounded annual growth rate. Maruti Suzuki share price rose up to 1.96% to  Rs 7, 274 against the previous close of Rs 7,135.05 on BSE.

Share price of Maruti opened at Rs 7,210 today. The stock has lost 6.77% in last one year and fallen 3.69% since the beginning of this year. The brokerage upgraded Maruti  Suzuki to buy and raised its target price to Rs 8,650 from Rs 7,450. Maruti Suzuki is best placed for recovery in the passenger vehicles segment, the brokerage said adding that it expects earnings cycle to bottom out in FY20. BofAML sees 26% compounded annual growth rate in earnings per share over FY 20-22. 

Despite auto slowdown, Maruti Suzuki looks at India as most progressive market: CEO Kenichi Ayukawa

The volumes of firm are expected to grow by 10% each in FY 21 and FY22.

Earlier this month, India's largest car maker reported a 4.33% rise in production  for November. Output rose after nine months of continuous decline led by a fall in demand due to the economic slowdown. In a regulatory filing, Maruti said the company produced a total of 1,41,834 cars in November compared to 1,35,946 units in the same period last year, translating into rise of 4.33 per cent.

Also read: Gearless cars now 11.6% of Maruti Suzuki's sales

Of the total cars produced in the month, 1,39,084 units were passenger vehicles, while 2,750 units were light commercial vehicles. The passenger compact car category, which comprises cars like New WagonR, Celerio, Ignis, Swift, Baleno, OEM Model, and Dzire, accounted for maximum 78,133 cars.

On December 6, Maruti Suzuki said it was recalling 63,493 petrol smart hybrid (SHVS) variants of Ciaz, Ertiga and XL6 vehicles manufactured between January 1, 2019 to November 21, 2019. On December 3, the car maker said it would raise prices across various models from January 2020. The company said the decision to increase prices was taken over rising input costs over the past year.

By Aseem Thapliyal