Maruti close to M&M, Tata Motors combined m-cap
A bull run in stock price has brought the market value of Maruti Suzuki, the country’s largest carmaker, quite closer to the combined market cap of two leading domestic automobile makers — Tata Motors and M&M. The stock price of Suzuki-promoted company closed at a new high of R6,952 on the BSE on Tuesday, taking its market cap to R2,10,024 crore, just about R1,100 crore lower than the combined market cap of R2,11,186 crore of Tata Motors (R1,26,264 crore) and M&M (R84,922 crore).
Maruti’s stock has surged 16 per cent this financial year. A key trigger behind the surge was the April sales volume, which registered an increase of 19 per cent to a new monthly record of 151,215 vehicles. Another positive influence came in the form of the record annual profit of R7,337 crore for last year, up 37 per cent over FY16.
Year after year, it has shown a volume growth higher to average industry’s performance. In FY17, its volumes grew almost 10 per cent to 1.56 million vehicles, which gave it a 47.3 per cent share in the world’s fifth biggest car market. Another push came today with the launch of the new Dzire, the company’s secondmost sold car and probably the biggest contributor to revenue. Analysts continue to maintain a ‘Buy’ call on Maruti.
The company, facing a capacity constraint which was visible in months of waiting period for models like Baleno and Brezza, has seen some ease up after parent Suzuki inaugurated its Gujarat plant. Maruti is again confident of a double-digit growth in volumes and it expects to do better than the industry, managing
“Maruti is again confident of a double-digit growth in volumes and it expects to do better than the industry”
KENICHI AYUKAWA
MD & CEO, Maruti Suzuki
director and chief executive officer Kenichi Ayukawa said recently.
Maruti also happens to be the eleventh most-valued domestic listed company while Tata Motors ranks eighteenth on the list. Maruti’s stock has delivered an impressive 83 per cent returns in one year. Stock price of Tata Motors, the country’s biggest automobile company by revenue, is down 27 per cent from its 52-week high of R598 in September last year. The weak performance of the company-owned luxury car brand Jaguar Land Rover and a sustained loss in domestic operations have had a bearing on the company’s stock performance. JLR posted a 62 per cent decline in profit for the October-December quarter. Domestic business, comprising passenger and commercial vehicles, reported a loss of R1,046 crore.
Sports utility vehicle and agri machinery major M&M’s stock is now about nine per cent lower to the 52-week high of R1,509 seen in August last year. The company, which is third biggest domestic passenger vehicle player, has struggled to grow passenger vehicle (PV) volumes ever since demonetisation was announced in November last year. Its PV sales posted a flat performance last financial year and started the first month of FY18 on a weak note.