Maruti Suzuki (MSIL)’s 4QFY25 margin came in 110bp below our estimate at 10.5%, largely due to the lumpy nature of multiple costs that affected its performance. However, given lower-than-expected depreciation and higher other income, PAT beat our estimate by 6%. We estimate the impact of such lumpy costs at 90bp for 4Q. While domestic demand remains weak, we expect MSIL to outperform its peers on the back of its new launches. We factor in MSIL to post 7.6% volume CAGR over FY25-27E, led by its new launches and healthy export outlook.
OutlookOverall, we expect MSIL to deliver a 10% earnings CAGR over FY25-27. At 24.3x FY26E/21.8x FY27E EPS, valuations appear attractive. Reiterate BUY with a TP of INR13,985, valued at 26x FY27E EPS.
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