Maruti Suzuki delivered decent growth in Q3, even in the face of a demand slowdown, which has ushered positivity among brokerages over its future growth prospects.
Maruti Suzuki recorded a 16 percent on-year increase in its consolidated net profit to Rs 3,727 crore for Q3 FY25, topping Moneycontrol's estimated Rs 3,596 crore. Revenue came in at Rs 38,764 crore, up 16 percent from the previous year but slightly lagging forecast of Rs 38,838 crore.
On the operational front, EBITDA margin inched slightly lower to 11.6 percent from 11.7 percent in Q3 FY24. However, this decline was largely anticipated by the market, as analysts had expected the automaker to absorb the impact of higher discounts and increased spending on advertising and promotions. However, the automaker managed to curtail the impact by a stronger product mix, higher average selling prices, and the benefits of operating leverage.
Brokerage firm Morgan Stanley also stood impressed with Maruti Suzuki's margin performance in light of muted demand growth. The firm has an 'overweight' call on the stock with a price target of Rs 14,942.
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CLSA raised its price target for Maruti by 6.5 percent to Rs 13,446 while retaining its 'outperform' call on the stock. CLSA remains positive on the company's prospects amid expectations of growing demand for CNG-powered cars.
Meanwhile, Nuvama Institutional Equities sees the launch of Maruti's e-Vitara model and a gradual recovery in hatchback demand as key catalysts for volumes ahead. "We believe the eVitara model should do well, and have factored in FY26 total volume (domestic + exports) of 72,000 units in our estimates," Nuvama stated.
Accordingly, Nuvama forecasts a revenue and EBITDA CAGR of 11 percent and 10 percent for Maruti Suzuki over FY25–27, led by robust growth in SUVs and moderate growth in cars. Nuvama also retained its 'buy' call on the stock with a target price of Rs 13,900.
On the other hand, Macquarie believes volume trend for battery electric vehicles (BEVs) and impact of price hikes on demand will be the key factors charting out the near-term trajectory for Maruti Suzuki. Macquarie has a 'neutral' call on Maruti Suzuki with a price target of Rs 12,296.
Shares of Maruti Suzuki opened 1 percent higher in early trade following its Q3 results. At 09.23 am, the stock was trading at Rs 12,030 on the NSE.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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