Buy Maruti Suzuki; target of Rs 14500: Motilal Oswal

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26 Aug, 2025 12:21

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Maruti Suzuki India (MSIL) reported an in-line performance during 3QFY25. Margin dilution in Q3 was restricted to 30bps QoQ despite the rise in discounts due to favorable operating leverage benefits. Retail demand showed signs of recovery, with retail sales rising ~8% YoY in 3Q (vs 3.5% YoY growth in 9MFY25), mainly driven by rural markets. We keep our estimates unchanged. For FY26, we anticipate multiple launch tailwinds for MSIL, including: 1) an EV launch, for India and exports; 2) hybrid variants; and 3) one more SUV. The stock is attractively valued at 23x/21x FY26E/FY27E EPS. Reiterate BUY with a revised TP of INR14,500 (premised on 26x Dec’26E EPS).

While we have factored in stable margins over FY24-27E, there could be a upside risk to our estimates if PV demand revives and MSIL is able to retain the benefits of an improving mix. At 23x FY26E/21x FY27E EPS, valuations appear attractive. Reiterate our BUY rating with a TP of INR14,500, valuing at 26x Dec’26E EPS.

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