A speedy ride in stock price has brought the market value of Maruti Suzuki, country's largest car maker, quite closer to the combined market cap of two leading domestic auto makers, Tata Motors and M&M. The stock price of Suzuki promoted company closed at a new high of Rs 6,952 at the BSE on Tuesday, taking its market cap to Rs 210,024 crore, just about Rs 1,100 crore lower to the combined market cap of Rs 211,186 crore between Tata Motors (Rs 126,264 crore) and M&M (Rs 84,922 crore).
Maruti's stock has surged 16 per cent in the new financial year which started last month. 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 form of the record annual profit of Rs 7,337 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 by 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 second most sold car and probably the biggest contributor to revenue. Analysts continue to maintain a 'Buy' call on Maruti.
The company, which was facing a capacity constraint, 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 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 in the list. Maruti's stock has delivered an impressive 83 per cent returns in last 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 Rs 598 in September last year. The weak performance of the company owned luxury car brand JLR 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 of passenger and commercial vehicles, reported a loss of Rs 1,046 crore.
SUV and agri machinery major M&M's stock is now about 9 per cent lower to the 52-week high of Rs 1,509 seen in August last year. The company, which is third biggest domestic passenger vehicle player, has struggled to grow 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.