MARUTI STOCK OUTLOOK FOR NEXT WEEK

"BUY MARUTI FUT 2 LOTS ABOVE 8900 TARGET 9020/ 9150
 SL 8750 "

Maruti Suzuki India is the market leader in the domestic passenger car industry With a market share of around 40 %, Orders for the revamped compact SUV Brezza and midsize SUV Grand Vitara, both recently launched, have already surpassed 70000 and 20000 respectively.

Going forward, we expect gross margin to improve due to the decline in commodity prices as the yen depreciates against the rupee/dollar. In addition, the volume ramp-up will lead to operational leverage. The higher fuel price has led to a very strong demand for CNG, supported by a good expansion of the CNG network (currently covering around 250 cities with 3800 stations vs. 1400 stations covering 150 cities 3-4 years ago). CNG volumes account for 20 % of total sales volumes.
Maruti, already strong in the entry-level segment, appears to be focusing on regaining lost market share with new launches in the compact and mid-size SUV segment. We expect an increase in demand from new launches along with the upgrading of the existing product portfolio, a moderation in commodity inflation and an improvement in ECU tightness to support the recovery in margins. The company would continue to gain market share, driven by an expected shift toward gasoline, CNG, and hybrid vehicles. Looking at the existing order book, we expect the company's volumes to grow strongly from H2FY23 onwards.
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