Maruti Suzuki hits fresh record high, CLSA raises target price to Rs8,100

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26 Aug, 2025 12:21

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Maruti Suzuki India which reported its results for the quarter ended March last month has been on an uptrend since them. The stock has rallied over 30 percent so far in the year 2017, but the rally is not over yet.

In an interview with CNBC-TV18, the management Maruti Suzuki expects a strong double digit volumes growth. It is possible for the company to sustain 15 percent annual growth in FY18”, says Kenichi Ayukawa, MD& CEO at Maruti Suzuki India Ltd

Global investment bank, CLSA in a report earlier this week raised 12-month target price to Rs8,100 on expectations of higher demand environment, and volume growth. It raised its 12-month target price to Rs8100 from Rs7600 earlier.

“Our channel checks and discussions with OEMs suggest that PV retail demand has improved sharply in the past two months. If this sustains, then FY18 will be the first double-digit growth year for Indian PV industry since FY11,” said the report.

However, if the demand improvement sustains, then waiting lists will grow for Maruti’s models, which would then drive Maruti to devote its scarce capacity to higher selling price and margins.

Maruti Suzuki capacity has risen from 1.6m units in FY17 to 1.85m in FY18 with the start of the Gujarat plant. “However, we understand that Maruti will not be able to produce more than 1.75m-1.80m units in FY18 as the Gujarat plant will take the time to ramp-up, which limits volume growth in FY18 to 13 percent,” it said.

CLSA is of the view that if the retail demand improvement sustains, then waiting lists could grow for some of Maruti’s models given the capacity constraint. Overall, we see the possibility of FY18 earnings expectations rising for Maruti.

In such a scenario, we believe that it is logical that Maruti will devote its scarce capacity to higher average selling price (ASP) and higher margin models and variants, besides cutting discounts, it said.