Maruti Suzuki Shares Hit Record As Analysts Turn Bullish On Registration Fee Waiver

Shares of Maruti Suzuki India Ltd. extended gains for the second day in a row to hit a record high on Wednesday, as brokerages said they were positive after the Uttar Pradesh government waived off registration fees on hybrid cars.

The Yogi Adityanath-led government, in a circular dated July 5, 2024, has decided to give a 100% waiver on the registration fee of strong hybrid cars and plug-in hybrid cars with immediate effect. 

"We are continuing to discuss with the central government and some state governments that there is an alternative to only electric vehicles, which we must look at," Chairman RC Bhargava told NDTV Profit. "It is important to promote technology other than electric vehicles because EVs alone can't do the job."

Citi Research said that Maruti Suzuki continues to be its top sector pick. "If other states follow the Uttar Pradesh government (notably Delhi, Haryana in NCR), we could see further upside to Maruti’s volumes," it said.

The brokerage has added a 90-day short-term upside view on the stock with a target price of Rs 15,100 apiece, implying an upside of 17.7%.

According to Morgan Stanley, Maruti, a key player in hybrids, stands to benefit from this waiver. It is important to monitor whether other states will follow suit, according to Morgan Stanley. The brokerage has maintained a 'buy' with a target price of Rs 14,105 apiece.

Emkay Research also holds the belief that a favourable tax on hybrid vehicles is beneficial, as it puts them on par with electric vehicles. It said that this will lead to a drop in on-road prices by 8–10% for Grand Vitara, and they believe these developments will improve the company's competitive positioning. However, the brokerage has a 'reduce' call on the stock with a target price of Rs 11,200 apiece, implying a downside of 12.7%.

Shares of the company rose as much as 3.68% to hit a record high of Rs 13,300 apiece. It pared gains to trade 3% higher at Rs 13,205 apiece as of 10:17 a.m. This compares to a 0.37% decline in the NSE Nifty 50 Index.

On Tuesday, the stock had logged its best session in 29 months. In its two-session rally, the stock has risen 9.5%.

The stock has risen 27.95% on a year-to-date basis and 34.25% in the last 12 months. The total traded volume so far in the day stood at 1.3 times its 30-day average. The relative strength index was at 68.86.

Out of 45 analysts tracking the company, 30 maintain a 'buy' rating, 11 recommend a 'hold,' and four suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 3.1%.