Shares of Maruti Suzuki India, the country’s largest carmaker, jumped as much as 2.5 per cent on Tuesday to hit a fresh all-time high of Rs. 6,690, a day after the company reported a total domestic passenger vehicle sales growth of 23.1 per cent on a year-on-year basis. The robust sales growth posted by Maruti Suzuki India during the month was led by sales of utility vehicles and compact models such as Vitara Brezza, Baleno, DZIRE, Dzire Tour, Ertiga and S-Cross.
In the month of April, Maruti Suzuki India’s total sales grew 19.5 per cent to 1,51,215 units from 1,26,569 units sold in the corresponding period last year, the auto maker said in a press release.
Total domestic sales rose 23.4 per cent on an annual basis to 1,44,492 units in April from 1,17,045 units sold in April of 2016.
The sales in April were driven by a massive rise in sales of compact models such as Swift, Celerio, Ignis, Baleno, DZIRE and Dzire Tour. The sales in the compact segment grew 39.1 per cent to 63,584 units compared with 45,700 units sold last year.
Utility vehicle segment which comprises of cars such as Ertiga, Gypsy, S-Cross and Vitara Brezza also reported solid sales growth of 28.6 per cent on a yea-on-year basis to 20,638 units from 16,044 units in April 2016.
Meanwhile, brokerages have maintained their bullish stance on Maruti Suzuki.
Edelweiss said Maruti Suzuki remains well placed to gain market share given robust new launch pipeline, expanding distribution and consumer preference shifting to petrol variants. An improved product mix (higher share of Baleno, Brezza, Ignis, new Dzire) will boost margin by lowering average discounts.
Edelweiss maintains ‘buy’ on Maruti Suzuki for target of Rs. 6,928.
Another brokerage HDFC Securities also maintains its ‘buy’ call on Maruti Suzuki for a target of Rs. 7,070. “We remain positive on Maruti Suzuki’s growth story on the back of strong volume growth, led by consistent volume uptick of Ciaz, Brezza and Baleno, and success of Ignis,” it said.
Increasing average sale price (ASP) led by an expanding portfolio in the premium segment, fresh capacity addition from the Gujarat facility, uptick in rural demand and supporting macro tailwinds like 7th Pay Commission payout, falling interest rates, urbanisation and growing middle class are also some of the reasons for HDFC Securities to remain bullish on the carmaker.
As of 9:51 am, Maruti Suzuki shares traded 1.9 per cent higher at Rs. 6,650, outperforming the Nifty which was up 0.47 per cent.