Maruti Suzuki Stock Price: There is a good opportunity to invest in the shares of auto sector giant Maruti Suzuki. Largecap auto stock is trading at around 28 per cent discount from its record high. The stock has lost 24 per cent in the last one month itself. At present, after the recent correction, the valuation of the stock has become attractive once again. Brokerage houses ICICI Securities, Ananda Rathi and Motilal Oswal are bullish on the stock. The brokerage house has given buy advice in the stock. He says that there is a strong demand situation in the sector going forward. The problem of chip shortage has also improved. This will support margin recovery. On the other hand, being a company with a leading market share, the sector would benefit the most from revival.

Shares lost 28 per cent since February 10

The shares of Maruti Suzuki have fallen significantly since February 10. On February 10, 2022, the stock reached a price of Rs 9050, which is a 1-year high. But today i.e. in the trading of March 8, the stock weakened to Rs 6537. That is, the share price has fallen by about 28 percent from the record high. The stock has lost 24 per cent in the last one month. Due to the current correction in the stock market, the pressure has increased further.

Share valuation and view

Brokerage house ICICI Securities has given investment advice in the stock with a target of Rs 8745. The brokerage house says that the gross margin of Maruti Suzuki (MSIL) has improved on a quarterly basis with an improving monthly production outlook. Business has been affected once again due to geopolitical tension. An increase in commodity (aluminum, palladium, plastics) prices and crude is also a negative factor. This may put pressure on the near term. Power / fuel and logistics costs contribute 3 to 4 percent of the company’s revenue.

The company had hiked the prices in the year 2021. There is such a plan this year as well. At the same time, PV industry volumes may see 8 percent growth in FY22E. The company will also benefit from strong demand going forward. The brokerage says that after the recent correction, the share price has become attractive and good growth can be seen from here. However, the brokerage has cut the earnings estimates for FY24E by 4 per cent and for FY23E by 15 per cent.

Supply will be normal in the coming days

Brokerage house Motilal Oswal has also advised to invest in the stock with a target of Rs 10,300. The brokerage says that the domestic demand for passenger vehicles is better. The booking rate is also looking better. However, industry volumes have been affected due to semiconductor shortage. The brokerage believes that the supply will be normal in the coming days. The company will get the benefit of its strong market share. Brokerage house Anand Rathi has given investment advice in the stock with a target of Rs 8500.

(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)