This Nifty 50 Stock Soars to ATH; Should You Book Profits?

1. Maruti Suzuki (NS:) India Limited, a constituent with a market cap of INR 3,64,614 crore, reached an all-time high of INR 12,025, prompting investors to consider booking profits.

2. Despite touching its fair value of INR 11,940, derived from multiple intrinsic value models, Maruti Suzuki boasts a solid financial health score of 4 out of 5, indicating strong fundamentals.

3. While investors holding the stock may contemplate profit booking, those monitoring for a dip should wait for a valuation gap to capitalize on, leveraging InvestingPro+ for valuable insights and a limited-time offer using coupon code PROC324.

Despite some correction in the benchmark Nifty 50 index, the share price of one of its constituents is making investors happy. The company is Maruti Suzuki India Limited which manufactures, purchases, and sells motor vehicles, components, and spare parts primarily in India, and has a market capitalization of INR 3,64,614 crore.

The stock jumped 3.3% to INR 11,987, by 2:44 PM IST, retracing a bit from the day’s high of INR 12,025 on the NSE. While any stock trading at an all-time high becomes a good candidate for long positions but investors also need to consider the intrinsic value of the stock.

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In the case of Maruti Suzuki India, the stock finally seems to have touched its fair value of INR 11,940 in today’s session. This value has been derived from the average of 14 different intrinsic values via various financial models. This helps in negating the extreme targets (high or low) and helps investors arrive at a much-rounded and realistic value.

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Investors holding the counter from the lower levels might now want to think of booking their profits. However, when you look at the financial health score, InvestingPro has given a rating of 4 out of 5 which represents great fundamentals. The lowest score in one of the parameters of the health check is the relative value which is what the concern is. ProTips has also flagged a high P/B ratio.

In this case, when the stock is fundamentally robust but reached its fair value, investors should keep it on the radar and wait for a dip so that the valuation gap increases. This gap can then be capitalized on for an improved return profile of the investment.

InvestingPro+ helps investors gain valuable insights into their stocks and is used by thousands of investors in India and worldwide. You can now avail the subscription for a limited time, at a steeply discounted price of INR 678/month for 2 years.

Click here to take your investment journey to the next level and don’t forget to use the coupon code PROC324 at the checkout for the additional 10% off.

X (formerly, Twitter) – Aayush Khanna