Maruti Suzuki hits new all-time high; Citi sees over 13% potential upside after Q1 earnings

Maruti Suzuki shares in early trade on Thursday marked its fresh record high of Rs 13,675 as most brokerages are bullish on the stock after its Q1 earnings. The stock at the day's high as climbed as much as 4 per cent.

The leading automaker on Wednesday posted a 47 per cent jump in its net profit to Rs 3,650 crore for the April-June quarter on account of cost reduction efforts, favourable commodity prices and foreign exchange gains.

The auto major had posted a net profit of Rs 2,485 crore in the April-June quarter of last fiscal. 

Net sales increased to Rs 33,875 crore in the June quarter as compared with Rs 30,845 crore in the year-ago period, according to an exchange filing. The country's largest carmaker said it sold 5,21,868 vehicles during the first quarter, up 5 per cent as compared to the same period previous fiscal. The company said it sold 4,51,308 units in the domestic market in the first quarter, an increase of 4 per cent over the same period last fiscal.

Export sales were at 70,560 units in the April-June quarter, a growth of 12 per cent over the first quarter of last fiscal.

Global brokerages view on Maruti Suzuki after Q1 results

The brokerages maintain that despite weak demand in Q1, the company has posted good earnings. Margins at the company have reported a 3.5 per cent expansion despite discounts and a decline in volume. This is on better operating performance and commodity tailwinds.  Realisations at the company also improved 5 per cent during the reporting quarter. Also, there has been registered recovery in exports in Africa, Middle East and LATAM. Also, the sentiment at the auto major has been aided by starting a new assembly line at company's Manesar facility.

Maruti Suzuki gives strong guidance

In its concall, the company has guided for a strong outlook for the auto major. In the short term, demand at the company is expected to remain soft. Further it mentioned that the fundamentals at the company will continue to remain robust. Also, Maruti Suzuki highlighted that rural demand is better in comparison to urban demand. Also, inventory at the auto major is said to be above normal during the review period.

Brokerages' target 

Jefferies on Maruti Suzuki (CMP 13116)
Maintain Buy , Target Raised to 15200 from 14750
 
Morgan Stanley on Maruti Suzuki (CMP 13116)
Maintain overweight, Target Raised to 15145 from 14105
 
Citi on Maruti Suzuki (CMP 13116)
Mantain Buy , Target Raised to 15500 from 15100, a nearly 13 per cent upside from the all-time high levels scaled today.
 
JP Morgan on Maruti Suzuki (CMP 13116)
Maintain Neutral ,Target Raised to 13275 from 12200
 
CLSA on Maruti Suzuki (CMP 13116)
Maintain outperform , Target Raised to 15000 from 14436
 
Bernstein on Maruti Suzuki (CMP 13116)
Maintain outperform , Target 14400
 
Nomura on Maruti Suzuki (CMP 13116)
Maintain Neutral , Target Raised to 13133 from  12522.88
 
Macquarie on Maruti Suzuki (CMP 13116)
Maintain Neutral , Target 12666