The company is poised to benefit from a domestic demand recovery propelled by GST rate rationalisation, sustained festive season momentum and launches in the premium segment. Exports in the quarter reached 110,487 units, posting a robust 42.2% YoY growth over Q2FY25. MSIL retained its leadership with a 45.4% share of India’s total passenger vehicle exports. We expect H2FY26E to outperform the first half, supported by GST-driven volume growth and resilient export performance. In the long term, with eight new SUVs planned by 2030E, MSIL is well-positioned to sustain growth through premiumization, electrification and export expansion.
OutlookWe remain cautiously optimistic about the company’s long-term prospects, driven by upcoming launches, premiumization, and export expansion. However, margin pressures, slower recovery in the key segment (Mini), and continued market share decline warrant a conservative stance. Accordingly, we revise our FY26E/27E EPS estimates downward by 3.8%/5.0%. We maintain our ‘REDUCE’ rating on the stock with a revised target price of INR 15,800 (earlier 15,200). Given the favorable macroeconomic conditions, we revise our PE multiple to 26x (earlier 24x) with an implied PEG ratio of 1.8 on average FY27/28E EPS.
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