Shares of two major Indian automakers, Maruti Suzuki India and Mahindra & Mahindra, experienced a surprising downturn despite their recent inclusion in prominent investment portfolios. This unexpected market reaction comes amidst positive analyst outlooks and strategic portfolio adjustments by major investment firms.

Morgan Stanley Bets on Maruti Suzuki

Morgan Stanley has added Maruti Suzuki to its Global Equity Markets and Asia Pacific Ex-Japan focus lists. The investment firm cited potential benefits from GST reforms and Maruti Suzuki's strategic focus on small cars as key factors for this decision. Morgan Stanley's optimistic outlook projects double-digit revenue growth for Maruti Suzuki in the future, supported by new model launches and increased exports.

Jefferies Adjusts India Portfolio

Chris Wood of Jefferies has replaced Aditya Birla Real Estate with Mahindra & Mahindra in his India equity portfolio. The 4% weightage allocated to Mahindra & Mahindra comes with a price target of ₹4,200.00, signaling confidence in the company's future performance.

Market Performance

Despite these positive developments:

• Mahindra & Mahindra shares traded 2.70% lower at ₹3,202.60
• Maruti Suzuki shares remained relatively stable at ₹14,752.00, close to its all-time high of ₹14,895.00

This market behavior contradicts the general trend in auto stocks, which have been rallying on expectations of lower GST rates on automobiles ahead of the festive season.

Maruti Suzuki's Recent Corporate Activities

Adding context to Maruti Suzuki's corporate governance, the company recently held its 44th Annual General Meeting (AGM). Key highlights from the AGM include:

• Consideration of audited standalone and consolidated financial statements
• Declaration of dividend on equity shares
• Appointment and re-appointment of directors, including Mr. Kenichi Ayukawa and Mr. Kenichiro Toyofuku
• Appointment of Price Waterhouse Chartered Accountants LLP as Statutory Auditors
• Special business items such as alteration of the Object Clause of the Memorandum of Association and appointment of Mr. Koichi Suzuki as a Director

These corporate actions demonstrate Maruti Suzuki's commitment to maintaining strong governance practices and strategic leadership, which may contribute to its attractiveness for investment portfolios despite short-term market fluctuations.

As the auto sector navigates through expectations of GST reforms and the upcoming festive season, investors will be closely watching how these portfolio inclusions and corporate developments translate into long-term performance for Maruti Suzuki and Mahindra & Mahindra.

Prime Minister Narendra Modi has marked a significant milestone in India's automotive and clean energy sectors by flagging off Suzuki's e-VITARA battery electric vehicle (BEV) at a ceremony in Hansalpur, Gujarat. This event underscores India's growing role as a global manufacturing hub for electric vehicles.

Global Export of Made-in-India EVs

The e-VITARA, manufactured in India, is poised to make its mark on the international stage. Suzuki plans to export this electric vehicle to over 100 countries, including major markets in Europe and Japan. This move not only showcases India's manufacturing capabilities but also positions the country as Suzuki's global manufacturing center for electric vehicles.

Maruti Suzuki Chairman RC Bhargava emphasized that India does not need protection from US tariff measures to remain competitive in global markets. The company will scale its electric and hybrid vehicle production based on demand, with one production line having a capacity of 250,000 units. Currently, all production is directed towards exports until domestic sales are announced.

EV and Hybrid Vehicle Production

Bhargava advocated for tax differentiation between vehicle technologies based on fuel efficiency and pollution performance, noting that petrol and diesel vehicles are currently taxed the same as hybrid and CNG vehicles. He highlighted that globally, both EVs and hybrids are selling well, with hybrids slightly ahead in most countries except China.

Boost to Domestic Battery Production

Modi inaugurated the production of hybrid battery electrodes at the TDS Lithium-Ion Battery plant in Gujarat. This facility is a joint venture between Toshiba, Denso, and Suzuki. The commencement of electrode production is a significant step towards localizing the EV supply chain, with over 80.00% of battery value now set to be manufactured within India.

Power Infrastructure Upgrades

The Prime Minister's visit also included the inauguration of power distribution projects valued at over Rs 1,000.00 crore. These projects, under the Uttar Gujarat Vij Company Limited, span across Ahmedabad, Mehsana, and Gandhinagar. The initiatives aim to reduce losses and modernize the electricity network, supporting the growing demand for power, including that from the expanding EV sector.

Implications for India's Automotive Sector

This series of inaugurations and launches highlights India's commitment to becoming a key player in the global EV market. By serving as Suzuki's hub for EV manufacturing and focusing on localizing critical components like batteries, India is positioning itself at the forefront of the automotive industry's electric revolution.

The export of the e-VITARA to major international markets demonstrates the quality and competitiveness of Indian-made electric vehicles on the global stage. This development is likely to attract further investments in the country's EV ecosystem and boost India's reputation as a manufacturing powerhouse.

Maruti Suzuki's Major Investment and Battery Production

In a significant development, a Suzuki Motor Co. executive announced that Maruti Suzuki India's Gujarat plant will serve as a major production center. The company plans to invest 700.00 billion rupees over the next 5-6 years, further solidifying Gujarat's position as a key automotive manufacturing hub.

Additionally, Maruti Suzuki India has achieved a notable milestone by commencing production of lithium-ion battery cells for hybrid vehicles. This move aligns with the company's strategy to localize critical components and strengthen its position in the evolving automotive landscape.

As the automotive industry worldwide shifts towards electrification, India's strategic moves in EV manufacturing and battery production are timely and significant. These developments are expected to create new job opportunities, drive technological advancements, and contribute to the country's economic growth while aligning with global sustainability goals.

Maruti Suzuki shares closed 1.85% higher at Rs 14,720.00 on the NSE, reflecting positive market sentiment towards these developments.