MSIL shares rallied 7% or nearly 650 points between May 18 and June 6 with minor corrections in between. The gains in Maruti were due to the stock’s own strength on the technical chart along with positive trends in the Nifty Auto pack. The medium to long-term prospects remain strong for the counter and minor corrections here and there could be on account of profit booking.
Technical View
Rajesh Palviya of Axis Securities: Buy | Target: Rs 9,800 – Rs 10,000 | Upside: Up to 4%
“The stock is in a strong uptrend across all the time frames, forming a series of higher tops and bottoms formation. On the weekly time frame, the prices are taking the shape of a rounding bottom formation and hence any decisive breakout above Rs 9,770 levels may lead to further momentum,” Palviya, told ETMarkets.
“The stock is also well placed above its 20, 50, 100, and 200-day SMA, and these averages are also rising along with prices which reaffirms bullish sentiments. Moreover, the relative strength indicator RSI is in favourable terrain, which signals rising strength. Rising volumes at every rally signify increased participation,” Palviya said.
The short-term support zone is around Rs 9,300 and the major support zone is about Rs 9,000, the Axis Securities analyst said, adding that the stock may extend its upward move towards Rs 9,800 – Rs 10,000 levels in upcoming months.
Fundamental View
Prabhudas Lilladher: Buy | Target: Rs 10,300 | Upside: 7%
Brokerage firm Prabhudas Lilladher remains positive on the growth prospects of MSIL given the market share gains and Average Selling Price (ASP) increase coming from filling white spaces in UV portfolio.
The brokerage firm has reiterated its ‘Buy’ stance on Maruti Suzuki shares with a revised target price of Rs 10,300 from an earlier target of Rs 10,600, estimating the fair value at 26X March 25E EPS. The commodity cost softening and higher UV share will also trigger improvement in its over FY23-25E by c220 bps. The brokerage firm also sees rural demand aiding India’s largest passenger vehicle manufacturer.
The company has been in the news over the launch of its 5-door off-roader Jimny. The sports utility vehicle (SUV) is expected to provide a heft to Maruti’s UV portfolio.
“You see the company has just launched Jimny and a couple of models will be launched in the next 12 months. There will be a blitzkrieg of EV model launches as we go into 2030. So what you will have is Maruti having a complete portfolio of vehicles and with the fresh product cycle, they are very well set,” Vinit Bolinjkar, Head of Research at Ventura Securities said.
“We are expecting a 50% upside for Maruti in the next 24 months and it will be one of the outperformers and could also prove to be a multibagger over the next four to five years,” Bolinjkar told ET NOW.
Negatives
“We cut our FY24/25 EPS estimates by c3% each, to factor in flattish volume guidance for entry segment cars,” the brokerage firm said.
Recommendations by Other Brokerages
– Sharekhan: Buy | Rs 10,965 | Upside: 14%
– Kunal Bothra to ET Now: Buy | Target: Rs 10,000 | Stop Loss: Rs 9,500 | Upside: 4%
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)