Stock Of The Day: Maruti Suzuki's 2025 Rally Revives Bulls; BofA Raises Price Target

Shares of Maruti Suzuki India Ltd. are poised for the Rs 14,000 mark, as per Bank of America, with the counter already posting over 10% rally this year after ending 2024 on a sour note.

The automaker rallied as much as 3.84% on Wednesday after the brokerage upgraded the stock to 'buy'. The target price by BofA indicates an upside of 19.2% from Tuesday's close.

The stock faces strong resistance around the Rs 12,160 level, aligning with the 200-day moving average. The counter fell below this long-term sentiment gauge in October last year and has not recovered since then. A breakout of this resistance could send the stock towards the Rs 12,400 zone.

Maruti Suzuki's stock, however, is currently trading above the 14-day simple moving average and the 21-day exponential moving average. The automaker's shares have risen over 10% so far this year. The stock could take immediate support at Tuesday's low of Rs 11,500 range.

The total traded volume so far in the day stood at three times its 30-day average. The relative strength index was at 64.

Thirty-seven out of the 49 analysts tracking the company have a 'buy' rating on the stock, nine suggest a 'hold' and three have a 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 11%.

BofA upgraded the stock to 'buy' from neutral, while IIFL Securities maintained its 'buy' rating with a target of Rs 13,800 per share.

The passenger vehicle industry is seeing some stabilisation with growth in retail sales and Maruti’s dealer inventory had come down sharply to nine days at the end of December 2024, IIFL said.

It expects 4-5% retail growth in fiscal 2026 would support a 7% growth in wholesales, and expects Maruti to perform in line with industry growth of 7-8% in fiscal 2026-27.

The automaker's average discounts of 4.3% revenue is unlikely to worsen further, it said. "Pickup in small cars, if any, would be a big positive for Maruti."

Maruti Suzuki reported robust sales data for December, beating market expectations. The company sold a total of 1.78 lakh units in December, exceeding the estimated 1.49 lakh units and marking a 29% year-on-year growth from 1.38 lakh units sold in the year-ago period. 

Domestic sales rose 27% to 1.41 lakh units from 1.11 lakh units a year ago, while exports surged 39% to a monthly record of 37,419 units, compared to 26,884 units in the same period last year.