CLSA upgrades Maruti on reduced yen exposure, PV segment success

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26 Aug, 2025 12:21

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Shares of Maruti rose over 3 percent intraday on Wednesday after CLSA upgraded it to buy with a target of Rs 5850 per share. It feels success of new products in personal vehicle segment and reduced exposure to yen works in favour of Maruti.

"These factors, combined with higher free cash flow (FCF) generation post-Gujarat plant deal, justify a higher valuation multiple than the stock’s historical average. The operational outlook is strong given improving PV industry growth andabating margin concerns," CLSA says in a note.

Success of Baleno (a premium small car), Ciaz (a sedan) and Vitara Brezza (an urban SUV) has taken the company to leadership position in all segments except rural SUVs and significantly improved Maruti’s long-term market share outlook.

The brokerage firm is also impressed that Maruti’s yen exposure is down to 14 percent from about 23 percent of sales. "Lower yen exposure reduces the risk of earnings volatility due to FX movements. Maruti defended its margins at 15 percent  in 1QFY17 despite most of the yen/steel pressures coming through and also hiked prices in Q,2 which has alleviated our concerns about margins,” it adds. CLSA believes Maruti’s multiple should sustain given rising confidence in sustainability of market share, the lower forex exposure and the improved FCF outlook. Maruti Suzuki ended at Rs 4,945.00, up Rs 111.75, or 2.31 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory