On Thursday India's carmaker leaders Maruti Suzuki declared their results for the second quarter of the ongoing financial year. The company posted a 60.18 per cent year-on-year increase in September quarter net profit at Rs 2,398 crore as against Rs 1,497 crore reported for the year-ago quarter.
On the back of strong Q2 results, Maruti share price traded at a new lifetime high of Rs. 5948 on 27th October 2016.
Higher volumes leading to higher capacity utilization, lesser expenses on sales promotion and marketing and elevated non-operating income contributed to increase in profits. This was partially counterbalanced by foreign exchange movement.
Total income increased 29.28 per cent year on year to Rs 20,296.80 crore from Rs 15,699.70 crore in the corresponding quarter last year.
Yesterday, Maruti share price closed at Rs. 5885, up by 0.27%. The stock has opened at Rs. 5897, higher than its day before yesterday’s close of Rs. 5869.10
The company sold a total of 418,470 vehicles during the quarter which indicates the growth of 18.4 per cent over the equivalent quarter of last financial year. Sales in the domestic market was valued at 3,83,030 units which translate into augmentation of 18.5 per cent. Exports stood at 35,440 units, up 17.9 per cent on a Year on Year basis. Margins came in at 17 per cent for the quarter.
Maruti results look exceptionally strong. But valuations headroom seems to be inadequate from here on, even if they think about a good 20 per cent growth next year in volumes. If the exports from Gujarat plant starts rising materially, then definitely this stock is there for further upside.
Maruti is recommended as the top 500 performing stock for the quarter by Dynamic Levels from among 1700 listed stocks. For the details on the levels of support and resistance of the stock, visit Maruti share price forecast page of Dynamic levels website.
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