Maruti Suzuki’s Tax Challenges and Strong Earnings Explained!

On Wednesday, Maruti Suzuki’s shares are in the spotlight because the Income Tax Authority sent the company a draft notice about its taxes for the year 2021-22. This notice suggests that Maruti should add nearly Rs 2,966 crore to its reported income, meaning they could owe more money in taxes. The company plans to dispute this notice by filing objections to the Dispute Resolution Panel (DRP). Maruti Suzuki reassured everyone that this tax issue will not affect how it operates or its business.

On another note, Maruti Suzuki recently shared its financial results for the third quarter. The company reported a 13% increase in its profit, making it Rs 3,525 crore. Their total revenue went up by 16% to Rs 38,492 crore. However, even though their earnings are good, their profit margins shrank a little to 11.6%.

Stock experts have a positive outlook for Maruti Suzuki, forecasting an average target price of Rs 14,012, which is an 18% increase from where it is now. A majority of analysts recommend buying the stock.

Currently, the stock shows a relative strength index (RSI) of 48.2, indicating it is stable and not too high or low. The Moving Average Convergence Divergence (MACD) is at -164.8, suggesting a slight downturn. The stock is doing okay when compared to different moving averages but needs to gain some momentum to rise further.

As of Tuesday, Maruti Suzuki’s shares closed at Rs 11,897.3, which is a small drop of 0.2%, while the overall market’s benchmark index, Sensex, had a slight increase. Over the last six months, Maruti’s stock has dropped by 7%, but it has increased significantly—by 44%—over the past two years. The company’s total market value stands at Rs 3,74,054 crore.