Maruti Suzuki Faces ₹2,160 Crore Tax Notice, Shares Dip by 2%

Maruti Suzuki Faces ₹2,160 Crore Tax Notice, Shares Dip by 2%

VoM News Desk | October 4, 2023 | 12:25 PM IST | Breaking News | Follow on Google News

Maruti Suzuki Faces ₹2,160 Crore Tax Notice, Shares Dip by 2%

Maruti Suzuki Faces ₹2,160 Crore Tax Notice, Shares Dip by 2%

Maruti Suzuki, India’s largest automaker, saw its share price decline by nearly 2% during Wednesday’s trading session. This drop followed the company’s receipt of a draft assessment notice from the Income Tax department, demanding unpaid dues totaling ₹2,160 crore for the financial year 2019-20, as disclosed in the company’s exchange filing.

Income Tax Notice Impact on Share Price

Maruti Suzuki’s share price today opened at ₹10,298.95 apiece on the BSE. The stock touched an intraday high of ₹10,298.95 and a low of ₹10,092.90. The company’s exchange filing explained the situation, stating, “The company has received draft Assessment Order for the FY 2019-20 wherein certain additions/disallowances amounting to ₹21,597 million with respect to returned income (the income disclosed by the Company in its Income Tax return) have been proposed.”

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Company Response and Outlook

Maruti Suzuki has committed to presenting its objections to the Dispute Resolution Panel. Furthermore, the company assured investors that this draft assessment order will not have any adverse effects on its financial health, operations, or other business activities.

Market Performance and Sales Data

Over the past year, Maruti Suzuki’s share price rose by 18.81%, although it underperformed its sector by 18.11%. In September 2023, the automaker achieved its highest-ever monthly sales, with total wholesales increasing by 2.8% YoY to 181,343 units, compared to 176,306 units dispatched to dealers during the same month the previous year.

Market Analyst Insights

Market analysts have noted that following the release of auto sales figures over the weekend, Maruti Suzuki’s stock prices experienced a correction over the past two trading sessions, resulting in a decline of over 4% for the week. According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, the stock has fallen below a critical immediate support level of 10,200. If prices continue to close below this level, there may be further profit-taking in the short term, potentially leading to a trading range of 10,000 to 9,800. Immediate resistance levels could be observed at 10,350 to 10,500. Given the shift in momentum from bullish to bearish, it is unlikely that a strong performance will be observed in the near future.

VoM News Desk

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