Buy Maruti Suzuki; target of Rs 14,154: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Maruti Suzuki

MSIL’s Q3FY25 standalone revenue grew by 15.6% YoY, in line with PLe/consensus estimates. The growth in revenue was driven by 13% YoY expansion in its volume and 2.3% rise in its realization. Favourable input cost was offset by sales promotion expenses and ad spends towards new launches leading its gross margin to decline by 68bps YoY to 28.4%. EBITDA increased by 14.4% YoY while margin remained flat at 11.6% and PAT increased by 12.6% YoY. The sluggish demand trend, specifically for small car segments, shall see industry grow in low single-digit for the next 2 years. However, given its diverse range of product portfolio of CNG/BEV/HEV/ICE, MSIL can be the key beneficiary of of state policies towards hybrids and other flex fuel powertrains.

Outlook

Additionally, exports continue to deliver strong volume growth with higher penetration of UVs which are high margin products. Factoring this, we assume its volume grow at a CAGR of 4.2% over FY24-27E translating to a revenue expansion of 8.9% while EBITDA/EPS is assumed to grow at a CAGR of 12.5%/13.2% over the same period. We retain “BUY” rating with a TP of Rs 14,154 (previous Rs 14,129) valuing it at 24x on its Dec’26 earnings.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Maruti Suzuki - 30012025 - prabhu