Buy Maruti Suzuki\, target price Rs 6850: Motilal Oswal

Motilal Oswal has given buy rating to Maruti Suzuki India with a target price of Rs 6850. The share price moved up by 2.33 per cent from its previous close of Rs 6185.60. The stock’s last traded price is Rs 6330.
Maruti Suzuki India Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 188443.58 Crore) operating in Auto sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 3679.00 Crore, down 78.59 % from last quarter Sales of Rs 17187.30 Crore and down 80.37 % from last year same quarter Sales of Rs 18738.80 Crore. The Company reported net profit after tax of Rs 247.00 Crore in latest quarter.

Investment Rationale
MSIL would be the fastest to recover on account of its strong brand equity and strength in entry-and mid-segment PVs. Key monitorables are (a) normalization of operations, and (b) sustenance of demand recovery. The stock trades at 40.7x/25.6x FY21/FY22E consolidated EPS. The brokerage has maintained Buy, with TP of Rs 6,850 (~25x Sep’22E consol. EPS).

Promoter/FII Holdings
Promoters held 56.3 per cent stake in the company as of June 30, 2020, while FIIs held 21.5 per cent, DIIs 17.1 per cent and public and others 5.2 per cent.