“The company has just launched Jimny and a couple of models will be launched in the next 12 months. There will be a blitzkrieg of EV model launches as we go into 2030. So what you will have is Maruti having a complete portfolio of vehicles. And with the fresh product cycle, they are very well set,” Vinit Bolinjkar, Head of Research at Ventura Securities told ET NOW.
“We are expecting a 50% upside in Maruti over the next 24 months. It will be one of the outperformers and could also prove to be a multibagger over the next four to five years,” Bolinjkar said.
Bolinjkar initiated a call on Maruti stock on June 7, its date coinciding with the launch of Jimny. He is bullish on the company which enjoys an enviable dominance over its rivals in the sedan and small car category.
After doubling its SUV market share, MSIL has its eyes fixed on doubling it further to about 25%, the Ventura Securities expert said. “So what happens is that not only is the revenue per car going up but also the EBITDA is growing and because of this measure we expect the company to maintain its margins and also continue to grow at a heady clip,” he added.
“But you know one point that everyone is missing out on and which can be a very big game changer is the fact that today in the small cab segment. Maruti is the only dominant player out there. When you get EVs in that segment, they are going to have the lion’s share because nobody has another model catering to the entry-level segment,” Bolinjkar said.
Analyst Sandip Sabharwal said that Jimny’s addition to Maruti’s portfolio has helped the stock price gain and he expects it to do well, going ahead. “I think we are seeing incremental improvements at Maruti from first being in denial two-three years back over the changes which were happening in the market space to adapting to them 1686434463 and I think that is driving the stock price also. I believe Maruti will continue to do well,” Sabharwal said in an interaction with ET NOW.Pitted against its nearest rivals Mahindra Thar and Force Motors’ Gurkha, the 5-door off-roader is available in two variants — Zeta and Alpha. Sabharwal does not see Jimny cannibalising Thar’s market and instead sees it competing with it in this segment.
Jimny, which is launched from a Nexa platform, has high competition in the overall SUV segment, market analyst Kaizad Hozdar, Investment Advisor of TrustPlutus told ETMarkets. He said that the launches from MSIL have not created a big buzz for many years now, barring a few exceptions like the Baleno and Grand Vitara.
The company has been able to retain its market share of 40-42% by offering big discounts on its products, Hozdar said, highlighting that MSIL’s EBITDA has not gone up over the last two years.
The market does not see Maruti’s products as too aspirational, he opined. On the contrary, Tata Motors and South Korean automaker Kia are making big strides in this segment apart from an already established player in Mahindra & Mahindra (M&M).
The carmaker has been slow in the EV space as well, so its golden days are behind now, the TrustPlutus analyst further added.
On the prospects of the product itself, both Sabharwal and Hozdar were willing to wait. “How this particular product does, is something which is tough to predict. We have to see how the market will take to it,” Sabharwal said.
Brokerage firm Nomura expects MSIL to sell 3,000-4,000 units of Jimny in a month. It sees Jimny facing more competition next year, with the launch of the 5-door Thar in Q4FY24.
Maruti Suzuki shares have underperformed the Nifty Auto index over a 12-month period and given returns of 21.42% versus a 28.37% upside seen in the 15-stock index.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
