Maruti Stocks: After the lockdown, recovery has started to appear in Maruti Suzuki’s business. The company has sold 513 percent more vehicles in the September quarter as compared to the June quarter. The company’s profit has increased due to lower sales volume, reduced sales promotion, reduced operating expenses, but on the other hand, rising commodity prices have also affected it. The company’s margins are still causing some concern. Currently, signs of management commentary are positive. They hope that the demand will be fully back on track in the coming days. After the results, the brokerage house has also formed an opinion on the stock. Know which brokerage has advised Nivea, then who has to wait.
After the second quarter results, there has been a big decline in Maruti’s stock. Today, the stock fell nearly 3 per cent to Rs 6881. It closed at Rs 7117 on Thursday. Today, the stock opened due to weakness and its high is only Rs 7110. However, in April this year, the stock made a low of Rs 4001, after which it has gained 78 percent. The 1-year high for the stock is Rs 7,753.65.
Results at a glance
Maruti Suzuki’s profit in the second quarter of FY 2021 was Rs 1371.6 crore. On a quarterly basis, the company has turned profitable from losses. At the same time, profit has increased by 1 percent on an annual basis. During July to September, Maruti Suzuki has sold a total of 3.93 lakh units. If you look at it on a quarterly basis, it has grown by 413 per cent. Income in the second quarter was Rs 18,745 crore. EBITDA has increased by 20 percent to Rs 1933.6 crore. While EBITDA margin has increased 80 bps to 10.3 per cent.
Other income of the company in the second quarter has been reduced to Rs 603 crore from 920 crore in the second quarter of last year. Tax expenditure increased to Rs 376.2 crore from 213.4 crore in the second quarter of last year.
Sentiment improved, but concerns over volume
Brokerage house MK Global says that the company will benefit from the festive sale in the coming days. Rural sentiments remain better. Due to the corona virus epidemic, people are now preferring their own vehicles instead of public transport. The company is in the Leithung position. There is no shortage of cash. At the same time, the company is again focusing on expansion and new products. It is expected that there will be an increase of 8 per cent in revenue and 21 per cent CAGR in earnings for FY20-23E.
According to brokerage house Kotak Securities, volume is expected to fall in FY 2021 due to weak demand. In the last financial also, it had fallen by 16 per cent. These are negative signs for the company. Brokerage house CLSA has also raised concerns about the volume.
How much return can I get?
Brokerage house MK Global has set a target of Rs 8,216, recommending investment in the stock, which was earlier Rs 6,910. Brokerage house CLSA has set a target of Rs 6,300, suggesting a sell-off in the stock, which was earlier Rs 5,675. HDFC Securities has set a target for Rs 8145 a share, advising Nivea. At the same time, Motilal Oswal, the broker house, has set a target of Rs 7850, while recommending the purchase for the stock.
(Note: We have given the information here based on the quarterly results of Axis Bank and the report of the brokerage house. Seeing the risk of the market, consult the experts at your level before investing.)