Amidst the sluggish environment in the stock market today, tremendous movement is being seen in the shares of the country’s largest car company Maruti Suzuki India Limited. Foreign brokerage firm Jefferies has expressed its confidence in this auto giant and advised it to ‘buy’. As soon as this news came, on June 30, Maruti’s shares jumped by more than 5 percent and it became the top gainer of Nifty.
Jefferies gave a target of Rs 16,500
Jefferies seems quite enthusiastic about the shares of Maruti Suzuki. The brokerage firm has upgraded the rating of this stock and set the new target price at Rs 16,500 per share. This simply means that this stock is expected to rise by about 23 percent from the closing price of the last trading session. Around 12:40 pm, the stock was seen trading at Rs 14,024 on the National Stock Exchange (NSE) with a strong rise of about Rs 612 (4.56 per cent). At the time of market closing, further rise was seen in the stock and it reached the level of Rs 14,147.
What is the game of profit and margin?
Mainly two big reasons are working behind this spectacular rise. First, there continues to be strong demand for passenger cars in the market, due to which sales figures are expected to be better. Second, the softening of crude oil and metal prices. Due to both these reasons, the cost pressure of the company will be reduced, due to which its profit margin will remain safe. In view of this positive environment, Jefferies has increased Maruti’s earnings per share (EPS) estimates by 2 to 4 percent for the financial year 2027 to 2029. It is also expected that in the coming few years the company can register an annual growth (CAGR) of 16 percent in its earnings.
This stock shined even in the gloom of the market
On one hand, Maruti’s shares are rising, while on the other hand, the mood of the stock market is not very good today. This company with a market cap of Rs 4.4 lakh crore has given returns of more than 12.6 percent to its investors in the last one year, which is a much better performance than the Nifty 50 index. It is worth noting that in the same period, Nifty had registered a decline of 6.4 percent.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
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