Maruti Suzuki Shares Off Record High As Nomura Expects Lower Pricing For Jimny

Shares of Maruti Suzuki India Ltd. reversed gains after hitting record high on Thursday as Nomura maintains a 'neutral' rating following the launch of its new five-door SUV, Jimny.

The brokerage expects niche buyers for the car and estimated lower than original prices for the newly launched vehicle.

Shares of Maruti Suzuki India declined 0.84% as of 11:58 a.m., compares to a 0.11% decline in the benchmark NSE Nifty 50.

The total traded volume stood at 61.1 times its 30-day average. The relative strength index was at 74, implying that the stock may be overbought.

Out of the 49 analysts tracking the company, 37 maintain a 'buy' rating, seven recommend a 'hold' and five suggest 'sell', according to Bloomberg. The average 12-month consensus price target implies an upside of 4.8%.

• Maintains a 'neutral' rating with a target price of Rs 9,659 per share.

• Expect lower prices in the range of Rs 10–11 lakh as compared to the original price of Rs 12.7 lakh for the new five-door Jimny SUV launched on June 7.

• Jimny can command some premium from the niche segment of buyers that it appeals to, the brokerage said. It estimates the company will sell 3,000 to 4,000 units per month in India.

• A rise in sales volume is limited at this price point, and it should have high margins. It would have to compete with the five-door Thar after its launch in the March quarter of 2024.

• Apart from Jimny, the company has launched the new Celerio, Baleno, Brezza, Alto, Grand Vitara, and Fronx.

• Expects the company to maintain its market share at approximately 42%. Market share gains in SUVs may be offset by weakness in the small-car segment, as per the brokerage.

• New launches like the Honda Elevate, Hyundai Exter, Tata Curvv, and five-door Thar will intensify competition in SUVs over the next year.

• The stock currently trades at approximately 23 times FY25 core earnings per share, according to the brokerage. Nomura prefers M&M in the sector.