Shares of Maruti Suzuki rose 4 percent to a day’s high of Rs 11,455.75 on the BSE today, rebounding after a nearly 4 percent drop the previous day following disappointing Q2 results. The carmaker reported a 17 percent decline in standalone net profit for the September quarter, coming in at Rs 3,069 crore.
The profit was below Street estimates of Rs 3,525 crore. The company’s revenue from operations during the quarter stood at Rs 37,203 crore, a marginal increase of 0.37 percent compared to Rs 37,062 crore in the corresponding quarter of the previous financial year. The revenue also fell short of Street estimates of Rs 37,322 crore.
The company sold 541,550 vehicles during the quarter, comprising 463,834 vehicles in the domestic market and 77,716 vehicles for export. While domestic volume declined by 3.9 percent, export volume grew by 12.1 percent compared to the same period last year.
Brokerages have also flagged demand concerns for entry-level cars. Analysts said the auto major is in a cyclical drag and that growing average selling price (AP) will be the key revenue driver for Maruti Suzuki going ahead in the wake of moderating volumes.
A recovery in the small car segment could provide additional thrust to growth; analysts said as they find Maruti Suzuki’s stock valuations inexpensive and reasonable for a fresh entry. A handful of brokerages have target prices of Rs 12,000-Rs 14,800 for the stock. The scrip closed at Rs 11,010 level on Tuesday.
Nirmal Bang said MSIL posted the highest-ever ASP of Rs 6,87,000 per vehicle in Q2, largely led by improving product mix. Over the last two years, ASPs have gone up by 19 percent. Nirmal Bang believes the trend will continue, led by the increasing share of SUVs, exports, and limited edition vehicles in the entry segment.
Small car sales, where MSIL holds a 71 percent market share, have been severely impacted over the past five years. FY24 volumes were 60 percent lower than the FY18 peak. Nirmal Bang said any recovery in the segment will give an additional thrust to volume growth.
“At the CMP, the stock trades at 19x Sept’26 EPS; we believe it’s a very lucrative entry point and maintain MSIL our top BUY in the OEM segment,” it said while suggesting a target price of Rs 14,550. Emkay Global has upgraded the MSIL stock to ‘Add’ from ‘Reduce’ with an unchanged target price of Rs 12,000, given the potential catalysts and inexpensive valuations at 25 times core September 2026 EPS.
“While we continue to believe that the near-term PV outlook is muted, we note a few potential catalysts for MSIL: a) bottoming out of volume decline in key entry-level models, b) 7-seater SUV launch (H2FY26E), c) EV launch (Q4FY25E), and d) optionality of small car recovery,” the brokerage said.
This brokerage has cut its FY25 EPS estimate by 8 percent and FY26-FY27 EPS estimates by 5 percent and 3 percent due to lower margins. Nuvama said festive season growth for Maruti Suzuki is likely at 14 percent, supported by strong UV sales and better rural demand. It noted that the FY25 retail growth guidance is 3–4 percent.
“We forecast a revenue/Ebitda CAGR of 10 percent/11 percent over FY24–27E led by robust growth in SUVs and moderate growth in cars. Launching the E-SUV (eVX model) and gradually recovering hatchback demand should catalyze volumes. We retain ‘BUY’ with a target price of Rs 13,800 (Rs 14,600 earlier) based on 27 times September 2026 core EPS plus cash of Rs 2,360 per share,” Nuvama said.
Nomura India suggested a target price of Rs 12,455 for Maruti Suzuki. The brokerage was concerned about the sustainability of margins, given more arduous demand conditions post-Q1. “But the sharp margin drop surprised us despite the higher SUV mix. We believe discounts have supported festive growth and may not reflect an improvement in underlying demand,” Nomura India said. It remained neutral on MSIL and preferred Mahindra & Mahindra Ltd.
UBS has reportedly cut the target price to Rs 14,800 from Rs 15,200. Investec has cut its target price to Rs 12,385 from Rs 14,030.
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