If you are learning how to open a demat account and intend to start investing in auto stocks soon, then you should study Maruti’s share price. Maruti Suzuki has been the undisputed leader of the passenger car segment in India for decades.
In the 1990s, Maruti was such a strong brand that buying a car was akin to buying a Maruti. After the launch of brands like Hyundai, Tata, etc., Maruti Suzuki lost some of its market share. However, it still remains the largest-selling car brand in the country.
Hence, if you are keen on the auto sector, you should keep an eye on Maruti’s share price. Let us look at Maruti Suzuki’s financials to understand why it should be a top contender in your portfolio.
Top Features In Maruti Suzuki’s Performance Over The Years
1. Consistently Growing Top And Bottom Line
Despite being the largest passenger car manufacturer, Maruti Suzuki is still able to grow its sales and net profit at a decent rate. Its consolidated net sales and consolidated net profit grew at a compounded annual growth rate (CAGR) of 17% and 24.2%, respectively, between FY 2019-20 and 2023-24.
2. Less Debt In The Balance Sheet
One of the quickest ways to open demat account for a business to expand is by taking loans. However, certain businesses try to generate cash from their operations, which they invest in their business to expand.
Such businesses do not need to take sizeable loans, as they can rely on their own cashflows. Maruti Suzuki certainly belongs to this category of companies. Its Annual Report for FY 2024 shows that total non-current liabilities were just 3% of the balance sheet’s size.
3. Presence Across Several Segments Of The Car Market
At one point in time, Maruti Suzuki was predominantly a small car manufacturer. Then, it started venturing out into other segments by launching bigger and premium cars. Today, it has a presence across several segments of the market.
No other car manufacturer in India has as wide a presence in terms of car variants as Maruti. Through Vitara, Brezza, and Fronx, Maruti Suzuki is present in the compact sports-utility-vehicles (SUV) segment.
Thanks to Ciaz and Dzire, it is present in the sedan segment. Besides, Alto is still a leading brand in the entry-level hatchback segment.
4. Rapidly Expanding Production Capacity
The Managing Director and CEO of Maruti Suzuki, Mr. Hisashi Takeuchi, has said that the company intends to nearly double its capacity to 4 million automobiles per annum in the next 7-8 years.
Hence, the company is likely to maintain its growth trajectory in the coming decade. As the Indian economy expands and Maruti grows its production capacity, it will be able to sell more cars.
5. Expected Foray In The Electric Vehicle Segment
Many people are moving towards electric vehicles (EV) due to concerns related to emissions. Taking note of this change, Maruti Suzuki is going to launch its first EV in 2025.
The company has also said that it is building a whole ecosystem, which will make it easier for people to buy an EV.
Currently, people are concerned about factors like charging points and the residual value of an EV after years of usage. If maruti share price is indeed able to address these issues, it might just become the leader of the EV transition in India.
Conclusion
You should keep tracking Maruti’s share price given its robust financials and exciting growth plans. No other car brand enjoys the kind of trust and goodwill that Maruti Suzuki commands in the market. Besides, its plans to increase its capacity and its expected EV foray hint that the company is poised to grow in the future.
