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Should you buy, sell or hold Maruti Suzuki shares after Q3 results?

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Maruti Suzuki share price: The Maruti Suzuki stock rose more than four percent on Thursday. Brokerages Goldman Sachs and Citi have maintained 'outperform' calls on Maruti Suzuki.

Should you buy, sell or hold Maruti Suzuki shares after Q3 results?
Maruti Suzuki shares hit a 52-week high on Thursday, after the country's largest carmaker reported its financial results for the quarter ended December.  On Tuesday, Maruti Suzuki reported a 47.9 percent year-on-year fall in net profit to Rs 1,011 crore for the third quarter of FY22, which exceeded Street estimates.
The Maruti Suzuki stock ended 2.5 percent higher at Rs 8,817.3  apiece on BSE, having risen as much as 4.3 percent to Rs 8,966.8 -- a 52-week high -- during the session.
During market hours on Tuesday, Maruti Suzuki reported revenue of Rs 23,246 crore for the three-month period, down 0.9 percent compared with the corresponding period a year ago.
Analysts in a CNBC-TV18 poll had estimated the company's October-December profit at Rs 860 crore and revenue at Rs 23,051 crore.
On Tuesday, the stock had ended 6.7 percent higher at Rs 8,600.6 apiece after the earnings announcement.
What brokerages say
Kotak Institutional Equities
The brokerage has maintained a 'sell' call on the stock with a target price of Rs 7,800. The carmaker's Q3 EBITDA exceeded expectations by 16 percent due to its cost-cutting efforts, Kotak Institutional Equities said.
The brokerage expects Maruti Suzuki to gain a market share of 200-250 basis points over the next 2-3 years.
CLSA
The brokerage has retained a 'sell' rating on the Maruti stock with a target price of Rs 6,440. The company's Q3 earnings were better than forecast due to lower-than-expected raw material costs, and its weaker positioning in the SUV segment is expected to impact market share, according to CLSA.
The brokerage also said headwinds in the form of tighter safety norms may hurt Maruti Suzuki's market share in the second half of FY23 and in FY24.
Goldman Sachs
The brokerage has retained an 'outperform' rating on the stock with a target price of Rs 10,100. The carmaker's Q3 performance beat estimates, and its margin beat was led by a combination of expense control and consistent price hikes, according to Goldman Sachs.
However, the brokerage said there is little visibility on when the company will get back to 100 perent normal production run rates. Goldman Sachs likes Maruti Suzuki's new product pipeline, with eight potential launches or upgrades over the next 18 months.
Citi
The brokerage has continued with an 'outperform' rating on Maruti Suzuki with a target price of Rs 10,000. The brokerage said the carmaker's Q3 earnings were strong with significant beats on the EBITDA, EBIT and profit fronts. The demand trends look encouraging and cost pressures are somewhat ebbing for the company, according to Citi.
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