Leading carmaker reports 10 per cent rise in sale; do you own it?

Total domestic passenger vehicle sales increased 15.45 per cent to 1,43,708 units 

On Friday, the Shares of Maruti Suzuki India limited surged by 4.72 per cent, to trade on an intraday high of Rs 9375.95. Currently, the shares are trading at Rs 9360 per share on BSE.    

Maruti Suzuki India, the country's largest carmaker, recorded a 10 per cent increase in total sales to 1,78,083 units in May, owing to strong domestic demand for utility cars. Total sales were hampered by sluggish demand for small automobiles and a decline in exports. The lack of electronic components had a slight influence on vehicle production. The company took every precaution feasible to lessen the damage.  

Domestic sales grew 12.95 per cent to 1,51,606 units in May, up from 1,34,222 units the previous year. Total domestic passenger vehicle sales increased 15.45 per cent to 1,43,708 units in August, up from 1,24,474 units in the same month the previous year.  

On other hand, exports fell 2.62 per cent to 26,477 units, compared to 27,191 units in the same month last year.  

The Company was established in 1981. In 1982, the Government of India and Suzuki Motor Corporation (SMC), Japan inked a joint venture agreement. It dominates the Indian passenger vehicle market. SMC's main subsidiary in terms of production output and sales is presently the Company. SMC presently holds 56.28 per cent of the company's equity.  

In peer comparison Maruti Suzuki India has a price to earning ratio of 34.24 times, over Mahindra & Mahindra Limited at 17.57 times. In addition to that, the company has a ROCE of 17.69 per cent, whereas Mahindra & Mahindra and Hindustan Motors havr ROCE of 13.64 per cent and 15.67 per cent, respectively.

Maruti Suzuki India's shares have seen strong purchasing activity as they have increased by more than 18 per cent in the last year. On other hand, the shares of Mahindra & Mahindra Limited have zoomed by more than 25 per cent in span of one year. Interestingly, the shares of Hindustan Motors have dipped more than 13 per cent in past one year. Hence, we can conclude that the shares of Maruti Suzuki India have shown moderate performance in past 1 year. Investors to keep close eye on this large-cap stock. 

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