Maruti Suzuki has beaten Tata Motors to regain its position as India’s most valuable automobile company. The market capitalisation of the Japanese brand increased due to an increase in stock prices.
If one asks a question to any Indian that which is the most valuable car brand of India, the answer would be Maruti Suzuki from 99% of people. Although it is true now, it hasn’t been the case ever since the stock of the company started trading in the Indian markets. Tata Motors has been above Maruti Suzuki in most of the years since 2003, the year when the Japanese carmaker was listed. The average lead that Tata had on Maruti was Rs. 20,619 crores. However, times have changed now and Maruti has finally overtaken the Indian carmaker with a rise in stock price to Rs. 4180/- making its market capitalisation Rs. 1.26 lakh crores, Rs. 0.13 lakh crores higher than Tata Motors.
Maruti Suzuki went past Tata Motors between 2008 and 2010 but thereafter the Indica maker clawed back the leader title. This year, the Alto maker finally managed to race past Tata on the basis of projected earnings growth. The earning of the brand have been constantly rising due to higher margins which are a result of new launches, favourable foreign exchange rate and a growth rate higher than the industry average. While Tata was experiencing a surge in stock prices riding on Jaguar Land Rover growth, it suffered due to a fall in JLR sales due to a slowdown in China which is its biggest market.
Maruti Suzuki sales are set to increase further after the Seventh Pay Commission is implemented. It has been noted that there’s a spike in car sales right after a new Pay Commission is implemented because lots of government employees end up buying cars soon after it. Considering the fact that Maruti offers special benefits to government employees and is one of the most trusted car brands in India, it is likely to be the biggest gainer from the new Pay Commission. Also, the upcoming car launches like the S-Cross, YRA and YBA will see the sales of the brand growing to new heights.