Accumulate Maruti Suzuki India: target of Rs 16,312: Deven Choksey

Deven Choksey's research report on Maruti Suzuki India

Maruti Suzuki India Ltd (MSIL) reported a steady performance in Q2 FY26, with overall wholesales growing 1.7% YoY to 550,874 units. Domestic volumes fell 5.1% YoY to 440,387 units as customers postponed purchases in anticipation of a possible GST-related price benefit post September 22. However, exports stood out strongly, rising 42.2% YoY to an all-time high of 110,487 units, cushioning domestic softness. Average realization improved 10.9% YoY, supporting revenue growth despite modest volume expansion.

Outlook

Maruti Suzuki’s Q2 FY26 quarterly performance reflected resilient revenue growth led by strong exports and better realizations, although margin softness persisted due to elevated operating costs and higher raw material pricing pressure. Management commentary indicated normalization in domestic demand post the GST-related deferral impact, while export momentum continues to be a key support to overall growth. The company reiterated its strategic objective of targeting 50% domestic market share and 10% EBIT margin over the medium term, supported by eight incremental SUV launches by FY31. We roll forward our valuation to Sep’27 estimates and value Maruti Suzuki at 26x Sep’27E EPS, arriving at a target price of INR 16,312. Given the recent share price performance and the stock currently trading at 26.9x/23.5x FY27E/FY28E EPS, we revise our stance to “ACCUMULATE” from BUY.