Q1 profit, SUV sales drive Maruti Suzuki shares to record highs; check analyst views & fresh target prices

Maruti Suzuki India Ltd shares on Thursday zoomed 3.85 per cent to scale their fresh all-time high of Rs 13,675. The stock was last seen trading 1.01 per cent up at Rs 13,300.70. At this price, it has gained 29.36 per cent in 2024 so far.

Today's uptick in the share price came after the carmaker reported a 46.9 per cent year-on-year (YoY) uptick in its first quarter net profit for the ongoing financial year 2024-25 (Q1 FY25) on account of cost reduction efforts, favourable commodity prices and foreign exchange. During the quarter under review, profit came at Rs 3,649.9 crore compared to Rs 2,485.1 crore in the year-ago period.

The company registered net sales of Rs 33,875.3 crore in Q1 FY25, an increase of 9.82 per cent as against Rs 30,845.2 crore in the corresponding period last year.

Maruti reported a 29 per cent rise in SUV (Sport utility vehicle) sales. The share of SUV sales in Maruti's overall sales grew to 31 per cent from 25 per cent a year ago.

"The company has started picking up on its margins due to better realisation in the SUV category. EBITDA growth is far superior compared to the growth in revenue. So, fundamentals remain absolutely intact. The success formula with hybrid is now going to be accelerated to other models," Deven Choksey, MD, DRChoksey FinServ Pvt Ltd told Business Today TV.

Analysts at Motilal Oswal Financial Services said the country's largest carmaker registered strong performance during the quarter despite weak demand. The domestic brokerage has maintained its 'Buy' call on Maruti, suggesting a target price of Rs 15,160.

"MSIL's Q1 FY25 operating performance was ahead of estimates as it was able to post margin improvement QoQ despite lower volumes and higher discounts. Margin improvement was driven by lower input cost, favorable currency benefit and higher other operating income. We have marginally tweaked our estimates. We expect MSIL to continue to outperform industry growth over FY25-26E," it stated.

Any GST cut or favorable policy towards hybrids by the government may drive a re-rating as MSIL would be the key beneficiary of the same. The stock trades at 26x/22x FY25E/FY26E consolidated EPS. Reiterate 'Buy' with a target price of Rs 15,160 (premised on 26x June 26E EPS)," the brokerage further said.

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "Technically, Maruti has been in a consolidation period for quite sometime at around Rs 12,000-13,000 levels. Currently, the stock has given a breakout with a positive bullish candle pattern on daily charts to signify strength. It has potential to rise further in the coming days. The RSI (Relative Strength Index) has indicated a steep rise showing a trend reversal to signal a buy and with consistent volume participation. We recommend a 'Buy' in this stock for an upside target of Rs 16,000-17,000, keeping a stop loss of Rs 12,000."

Rupak De, Senior Technical Analyst at LKP Securities, said, "The stock has given a falling channel breakout on daily charts, suggesting a rise in optimism. The recent price rise was backed by significant volume. In the short term, the stock might move towards Rs 14,000, with support on the lower end placed at Rs 12,850."