Maruti Suzuki India’s share price rose 5.3% to Rs 8,196 apiece on BSE, hitting a three-month high on Thursday. The stock was trading at its highest level since March 2, 2022 and jumped 25% from its 52-week low of Rs 6,540 hit in March this year. Analysts say that with today’s rally, the stock has broken out of an 8000-8080 consolidation zone. “Technically, the stock appears to have formed a solid support base around the 7400-7500 area,” Aamar Deo Singh, Head Advisory, Angel Broking, told FinancialExpress.com.
Fundamentally, Singh said the company plans to ramp up production in FY23, to top production of 2 million, its highest ever in a year. “Holding above 8200 is crucial, so the stock has the potential to rally towards 8500-8700 in the near term,” he added.
Motilal Oswal Financial Services, in a report last week, said Maruti Suzuki’s product portfolio had just kicked off with key model upgrades and was set to launch new models. He added that a good return of the product life cycle will lead to a recovery in market share, strong demand, improved supplies and stable raw material prices will propel the improvement in EBIT margin. The research and brokerage firm has assigned the stock a ‘buy’ rating, with a price target of 10,000 rupees, implying upside potential of 22% from current levels. He added that strong demand, improving chip supply, moderating commodity inflation and favorable exchange rates would support the recovery in margins.
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MSIL’s profitability has been significantly impacted by inflation, raw material prices, shortage of semiconductors, weak demand and multiple headwinds resulting in low operating margins, said Ravi Singh, vice -President and Head of Research, Share India Securities, at FinancialExpress.com. “Hoping for an improvement in supplies and commodity prices, Maruti Suzuki stock price is outperforming the index. The stock has support near 8000 levels which appears to be sustainable for a fresh target of 8350 short-term levels,” he added.
Falling metal prices and a decent correction in crude oil prices led to positivity in the automotive sector, including Maruti Suzuki India, Pavitraa Shetty, co-founder and trainer, Tips2Trades, told FinancialExpress.com. “Technically, 8100 remains strong resistance on both the daily and weekly charts. Investors should look to build this stock only on declines near 7600-7700 for higher targets of 9200 in the coming months,” said added Shetty.
Akhilesh Jat, Category Manager – Equity Research, CapitalVia Research, told FinancialExpress.com that the surge in Maruti Suzuki’s share price was anticipated by strong demand for its cars and the appreciation of the rupee against the yen. which reduced the cost of raw materials. In addition, the number of PV sales for the month of June should be quite high.
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