Buy Maruti Suzuki; target of Rs 19000: Anand Rathi

Anand Rathi's research report on Maruti Suzuki

Maruti Suzuki’s Q2 standalone EBITDA was flat y/y at Rs44bn, above our Rs38bn estimate, owing higher realisation & other operating income. We expect GST cuts, I-T benefits, monetary reforms and coming Pay Commission norms to push up its H2 FY26/FY27/FY28 domestic volumes growth 7/8/7%. The GST cut has shifted demand to small cars, which augurs well for its market share. Exports would record a stronger, 18%, volume CAGR, aided by leveraging Toyota/Suzuki’s global network and portfolio expansion (e-Vitara).

Outlook

We expect 8/14/16% volume/revenue/EBITDA CAGRs over FY25-28. Our FY26-27e EPS is 3-10% lower, mainly due to higher depreciation cost and the near-term margin trim. We maintain a Buy with a higher TP of Rs19,000 (earlier Rs13,350).