Maruti Suzuki’s shares saw slight gains early on March 21 after Morgan Stanley assigned an ‘overweight’ rating, citing the potential impact of a proposed hybrid duty cut on the automaker.
During the Rising Bharat Summit in New Delhi on March 19, Nitin Gadkari proposed slashing the GST on hybrid cars to 12 percent from 48 percent, potentially benefiting Maruti Suzuki.
Morgan Stanley set a price target of Rs 11,228 for the company, which Maruti has already exceeded. On March 20, the stock crossed the Rs 12,000 mark for the first time.
There’s a noticeable discrepancy in vehicle taxation, with electric vehicles subject to a 5 percent GST and hybrids facing a 48 percent GST, despite hybrids offering significant environmental benefits compared to internal combustion engine (ICE) vehicles.
Maruti Suzuki is expected to maintain its leading position in the CNG passenger vehicle (PV) segment, with a projected 72 percent share, according to a recent report by CLSA. Analysts anticipate the CNG PV market share to increase from 15 percent in FY2024 to 22 percent in FY2030, benefiting companies like Maruti Suzuki and Tata Motors.
The stock has surged 16 percent since the beginning of the year.
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