Buy Maruti Suzuki; target of Rs 17,000 : ICICI Securities

ICICI Securities research report on Maruti Suzuki

The recent reduction in GST rates from 28% to 18% across most segments in the auto sector may inject fresh demand momentum. This is in addition to the recent rationalisation of personal income tax slabs, interest rate cuts and the upcoming Pay Commission revisions. These factors are expected to increase affordability and stimulate demand, addressing the industry's challenges of muted sales, especially in the entry level segment. In the backdrop of this favourable environment, MSIL's new launches, starting with its new SUV- the Victoris- is anticipated to enhance its competitive position in the highgrowth mid-size SUV market and drive export growth.

Outlook

With these favourable macro conditions and new launches, we project strong growth for MSIL, factoring in a volume/revenue/EPS CAGR of 8%/ 14%/15% during FY25–28E. Maintain BUY on MSIL, based on 27x PE (earlier 25x) on Sep’27 EPS to arrive at our TP of INR 17,000 (earlier INR 14,500).

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