Shares of Maruti Suzuki rose 2 per cent in Thursday’s trade after the car maker said it would pass on some of the cost pressure to consumers by raising vehicle prices from April 1. The price increase would vary across models, it told stock exchanges. Maruti’s decision to increase vehicle prices came after a similar move by Tata Motors, which announced 5 per cent jump in prices of its commercial vehicles starting April.
Following the development, the stock rose 1.5 per cent to hit a high of Rs 8,375.10. The scrip is flat year-to-date but is up 9 per cent for the one-year period. In comparison, the BSE Auto index is down 2.9 per cent year-to-date but has rallied 17.88 per cent in the last one year.
“The company continues to witness increased cost pressure driven by overall inflation and regulatory requirements. While the company makes maximum effort to reduce cost and partially offset the increase, it has become imperative to pass on some of the impact through a price increase,” Maruti Suzuki said in a brief note.
“The company has planned this price increase in April, 2023 which shall vary across models,” Maruti Suzuki added.
The scrip is a consensus buy with an average target of Rs 9,515.67, as per publicly available data with Trendlyne. The target suggests a potential 14 per cent upside ahead for the stock. The scrip has 28 ‘Strong Buy’, three ‘Buy’ and five ‘Hold’ and ‘Sell’ calls each, as per Trendlyne.
Earlier, Tata MotorsтАЩ announced its second price hike in four months. Tata Motors said its decision to increase prices was a result of the company’s efforts to comply with the more stringent BS6 phase II emission norms, the largest commercial vehicle manufacturer in India said.
Also read: Vedanta shares extend fall, drop 6% amid Anil Agarwal stake sale report
Also read: JK Tyre shares extend gains, jump 5% today amid heavy volumes; here’s why
