Maruti Suzuki, Tata Motors share gains 20 pc in 1 year

Auto stocks have emerged as winners in an otherwise weak market of late. Shares of four-wheeler maker Maruti Suzuki increased by 20.93 per cent in the past one year. The shares of JLR-owner Tata Motors climbed 19.65 per cent in the one-year period. M&M delivered a 53.63 per cent return during the period.

Brokerage Prabhudas Lilladher likes M&M due to its back-to- back successful launches in the highly competitive SUV space, its leadership position in the tractor industry, its proactiveness to leverage the EV trend and its well-played out capital allocation strategy. Since the launch of Scorpio-N on June 27, the auto stock has rallied 15.41 per cent.

The launch of the latest version of Vitara Brezza on June 30 has not lifted the stock much, according to Maruti Suzuki. The stock of Maruti, which is Rs 8,550 apiece, has gained 0.50 per cent since the launch.

The Tata Motors stock fell 17 per cent this year, due to weak global markets, Russia-Ukraine war and the potential for Britain entering a recession.

JLR contributes about 67 per cent of Tata Motors' revenues.

Motilal Oswal said in a report that sales of personal vehicles and commercial vehicles were inline with sales in September, while tractors were above estimates.

The financial services firm said in the personal vehicles space, sales of Maruti Suzuki and Tata Motors grew 104 per cent and 85 per cent YoY.

ALSO READ: Maruti Suzuki starts selling Grand Vitara; prices start from Rs 10.45 lakh. Check details.

Pranit Arora, co-founder of Univest, prefers M&M among the three auto majors due to recent launches.

M&M is the preferred choice among the three at the moment. It plans to introduce EVs soon. Tata Motors may have taken the lead in EVs, but the burden of JLR continues to weigh it down despite leadership in four-wheeler EVs. Maruti Suzuki, though it has the highest market share, is slowly losing it to other players. The demand has shifted from compact cars, which was Maruti Suzuki's strength, he said.

Arora said M&M can reach levels of 1,500 in the coming few months.

Abhijeet from Tips 2 trade said Maruti M&M are much better placed as long-term bets with targets of Rs 9,930 and Rs 1,500 look likely on a daily close above Rs 9,418 and Rs 1,338 levels.

Tata Motors could recover smartly from current levels in the near term despite the loss making and heavily in debt, he said.

Ravi Singhal, CEO at GCL, is a big fan of M&M among the three stocks.

What is going to happen to Tata Motors' shares after four sessions?

Maruti is India's largest market share and focuses on commercial and exports. Higher royalties have an impact because the yen has risen. Tata Motors has the largest market share of heavy commercial vehicles. JLR has a global presence. There are fears of a European recession. It has a first mover advantage in India for electric vehicles. Both the passenger and commercial sectors are performing admirably, but there is still room for improvement, Singhal said.

Singhal said tractor and light commercial vehicles, along with SUVs, have the largest market share for M&M now. He said that the company is focusing on electric vehicles and is also doing well on the two-wheeler front. Singhal said M&M has the best portfolio mix.