Maruti Suzuki shares rose as much as 4 percent to Rs 7,183.75 on Tuesday, extending a 3-day rally, on reports India's largest automaker expects to clock higher car sales in September from a month ago.

India will celebrate the nine-day Navaratri festival, which typically boosts domestic sales, from September 29.

Mirroring the optimism, Maruti's shares have surged over 16 percent in the last three days, taking the overall weekly gain to almost 15 percent.

Separately, the automaker said it will not reduce the price of its cars, signalling it would not pass on the benefits coming from the reduced tax outgo after the government slashed the existing corporate tax rate.

Maruti Suzuki chairman RC Bhargava on Monday said that corporate tax savings after finance minister Nirmala Sitharman’s announcement are minuscule and not sufficient for India’s largest carmaker to reduce the cost of its offerings.

"If you look at a company’s corporate ratios related to the turnover... the savings in tax will be something like one-fifth or one-sixth of the total tax payment. Then you see how much it comes as a percentage of the sale value... you have to keep in mind also that most companies are giving very big discounts today anyway. So all of that has to be considered. It may take a couple of days to work out what is possible,” Bhargava said in an interview with CNBC-TV18.

Maruti Suzuki’s total sales in August 2019 stood at 106,413 amid a general slowdown in the sector from last few months. India's largest automaker's sales have declined more than 34 percent year-on-year.

The company reported a 27.3 percent decline in its net profit at Rs 1,435.5 crore for the first quarter ended June 30 mainly due to lower sales volume and higher depreciation expenses. A CNBC-TV18 poll had estimated a profit of Rs 1,350 crore.

At 10.20 am, Maruti Suzuki shares quoted at Rs 7046 per share on BSE, higher by 2.13 percent, despite opening with a loss of 2.9 percent today. So far this year, the stock has given negative returns with the scrip correcting by over 5.5 percent.

Also, catch all the latest market action and developments with CNBC-TV18.com's live blog.