Maruti Stock Surges Over 5%, Lifts Nifty Auto To Top Sectoral Indices

Automobile stocks remained among the strong performers on Wednesday, lifting Nifty Auto to the top among the sectoral indices.
The index surged over 2.7 percent, rising about 694 points, to remain the best performing among the 19 sectoral indices on the National Stock Exchange.

The uptick in the index came on the back of stocks like Maruti Suzuki, Mahindra & Mahindra, Eicher Motors, and Tata Motors Passenger Vehicles.

The stock of Maruti Suzuki climbed over 5 percent on Wednesday after reporting mixed results in the March quarter. The stock opened 1.5 percent higher on the bourses at Rs 13,090 compared to the previous close of Rs 12,892 apiece.

During early trade, the stock jumped up to Rs 13,537, which was over 5 percent higher than the previous close. Maruti Suzuki was the top gainer among the Nifty 50 lot of the National Stock Exchange.

The buying rally came despite India’s largest automobile company reporting a 6.5 percent year-on-year decline in consolidated net profit to Rs 3,659 crore in the March quarter of the previous financial year.

However, the company’s revenue rose 28.2 percent to Rs 52,462.5 crore. The performance was pressured by higher raw material costs, lower other income, and increased tax outgo.

On a standalone basis, net profit fell 7 percent, while margins remained largely flat at 11.7 percent.

On the positive front, the company posted its highest-ever quarterly sales volume. Exports also hit their record high. Maruti Suzuki is the biggest passenger vehicle exporter of India.

As per market experts, the company may face some headwinds due to higher commodity prices amid the West Asian war. Rising competition from other players is also a challenge for the company.

Other automobile stocks also contributed to the rise in Nifty Auto. While Mahindra & Mahindra rose up to 3.3 percent, tractor manufacturer Eicher Motors climbed 3.1 percent.

The stock of Tata Motors Passenger Vehicles, the leader of India’s electric passenger car market, also rose up to 3.6 percent during early trade.