Maruti Suzuki shares hit ₹13,000 for first time, stock up 26% YTD. What's driving the rally?

The shares of Maruti Suzuki, India’s largest car manufacturer in terms of market share, climbed to a record high on Tuesday, April 23. The stock peaked to ₹13,000 apiece on the National Stock Exchange (NSE), which is the highest scrip value scaled by the company since its listing.

At 2:38 pm, the shares were trading at ₹13,000.1 apiece, up 1.7% as against the previous day’s close. Year-to-date (YTD), the stock has rallied by 26.4%, and the surge has been sharper at 53.5% in the last one-year period.

At the current share value, Maruti Suzuki’s market-capitalisation stood at ₹4.09 lakh crore. The fresh surge in the stock value was not preceded by any major announcement by the company during the trading hours.

Also Read: Maruti Suzuki increases Manesar plant capacity by one lakh units

What are the likely reasons behind Maruti Suzuki’s rally?

• Q4 results anticipation

The jump in the automobile major’s shares indicate an optimistic market sentiment for the company ahead of the release of its fourth quarter (Q4 FY24) results. Maruti Suzuki, earlier this month, informed the bourses that its board of directors will meet on Friday, April 26, to consider and approve the release of the earnings report.

• Strong sales

The expectation of robust results are fueled by the growth in sales reported by Maruti during March 2024. The company’s overall automobile sales increased by 10%, even as exports declined by 14%. In the domestic market, it sold 156,330 vehicles during the month, higher by 15% year-on-year.

For the entire fiscal year ending March 31, 2024, the total sales – domestic sales plus exports – stood at the “highest-ever” at 21.35 lakh units, it said, while releasing the data on April 1.

Also Read: Maruti Suzuki March auto sales up 10% at 1.87 lakh units, exports dip 14%

• Capacity expansion

Maruti Suzuki is also expected to have uplifted investor confidence by expanding the manufacturing capacity at its Manesar plant by an additional 100,000 units. With this addition, the total manufacturing capability at Manesar stands at 900,000 vehicles per annum, the carmaker said in a statement issued on April 9.

• Revision in vehicle costs

In a decision that is expected to significantly increase its margin, Maruti on April 10 announced that the price of Swift – one of its in-demand subcompact five-seater – has been raised by up to ₹25,000. Similarly, it also raised the price of Grand Vitara Sigma variant, one of its premium sports utility vehicle (SUV) offerings, by up to ₹19,000.

As of March 2024, Maruti held a market share of 40.4% in the passenger vehicles segment, according to the data released by the Federation of Automobile Dealers.