MARUTI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.1
| Stock Code | MARUTI | Market Cap | 4,64,576 Cr. | Current Price | 14,780 ₹ | High / Low | 17,372 ₹ |
| Stock P/E | 32.0 | Book Value | 3,098 ₹ | Dividend Yield | 0.91 % | ROCE | 21.7 % |
| ROE | 15.6 % | Face Value | 5.00 ₹ | DMA 50 | 15,816 ₹ | DMA 200 | 14,741 ₹ |
| Chg in FII Hold | -0.02 % | Chg in DII Hold | 0.29 % | PAT Qtr | 3,794 Cr. | PAT Prev Qtr | 3,303 Cr. |
| RSI | 36.0 | MACD | -518 | Volume | 6,54,137 | Avg Vol 1Wk | 8,42,095 |
| Low price | 11,059 ₹ | High price | 17,372 ₹ | PEG Ratio | 0.44 | Debt to equity | 0.00 |
| 52w Index | 58.9 % | Qtr Profit Var | 3.68 % | EPS | 462 ₹ | Industry PE | 31.8 |
📊 Analysis: Maruti Suzuki trades at ₹14,780 with a P/E of 32.0, in line with the industry average of 31.8, suggesting fair valuation. ROE (15.6%) and ROCE (21.7%) are strong, reflecting efficient capital utilization. Dividend yield at 0.91% provides modest income support. The PEG ratio (0.44) indicates attractive growth potential relative to valuation. Technical indicators (RSI 36.0, MACD -518) show bearish momentum, suggesting near-term weakness. PAT has improved sequentially (3,303 Cr. → 3,794 Cr.), highlighting earnings growth. Debt-to-equity at 0.00 indicates a debt-free balance sheet, strengthening financial stability.
💡 Entry Price Zone: Ideal entry would be between ₹14,200–₹14,600, closer to the DMA 200 (₹14,741), offering better valuation comfort and risk-reward balance.
📈 Exit / Holding Strategy: If already holding, Maruti Suzuki is a strong candidate for long-term investment (5+ years) given robust fundamentals and growth potential. Exit strategy should be considered only if price sustains below ₹14,000 or if profitability metrics weaken significantly. Otherwise, continue holding for compounding returns and dividend income.
✅ Positive
- Strong ROE (15.6%) and ROCE (21.7%).
- P/E (32.0) in line with industry average, fair valuation.
- PEG ratio (0.44) highlights attractive growth potential.
- Debt-free balance sheet (Debt-to-equity 0.00).
- Sequential PAT growth (3,303 Cr. → 3,794 Cr.).
⚠️ Limitation
- Dividend yield at 0.91%, modest for income investors.
- Stock trading below DMA 50 (₹15,816), reflecting short-term weakness.
- Quarterly profit variation only 3.68%, showing limited growth momentum.
📉 Company Negative News
- FII holdings reduced (-0.02%), showing slight decline in foreign investor interest.
- Weak short-term technical momentum (RSI 36, MACD -518).
📈 Company Positive News
- DII holdings increased (+0.29%), showing domestic institutional confidence.
- EPS at ₹462, reflecting strong earnings power.
- Stock trading well above 52-week low (₹11,059), showing resilience.
🏭 Industry
- Automotive sector has long-term growth potential driven by rising demand for passenger vehicles and EV adoption.
- Industry P/E at 31.8 highlights Maruti Suzuki is trading at fair valuation compared to peers.
🔎 Conclusion
Maruti Suzuki is fundamentally strong with high ROE, ROCE, and fair valuation relative to peers. It is a good candidate for long-term investment. Best strategy: accumulate between ₹14,200–₹14,600 and hold for 5+ years to benefit from compounding and dividend income. Existing holders should continue holding unless fundamentals weaken or price drops below ₹14,000.