Maruti reported a 46.9% year-on-year (YoY) increase in standalone profit for the June quarter, reaching Rs 3,650 crore, surpassing the Street estimate of Rs 3,467 crore. However, Q1 revenue rose 9.82% YoY to Rs 33,875 crore, falling short of the estimate of Rs 34,770 crore.
The automaker’s margins for the quarter were 12.6%, exceeding the 12% estimate from an ET Now poll. During the quarter, it sold a total of 521,868 vehicles, higher by 4.8% compared to the same period the previous year.
In a regulatory filing, the auto major said the jump in profit was broadly on account of cost reduction efforts, favourable commodity prices, and foreign exchange.
Should you buy, sell, or hold Maruti’s stock? Here’s what analysts say:
Nomura
Global brokerage firm Nomura remained with its ‘Neutral’ rating on Maruti Suzuki with a target price of Rs 13,133.
“Margins for the quarter were strong driven by tailwinds from material costs and forex. But most of these benefits are in the base now. We see tougher demand conditions – signs of rising inventory and discounts. This can pose a risk to the sustainability of these margins,” the brokerage firm said.
“Given new launches from competition, MSIL’s market share over FY25-26F is at risk and stronger push for growth is required, in our view. Key upsides are medium-term potential of exports, and any tax cut on hybrids,” it added.
JM Financial
JM Financial maintained its ‘Buy’ rating on Maruti Suzuki with a target price of Rs 15,000.
“MSIL, with back-to-back SUV launches has strengthened its presence in the B-segment. The company plans multiple new launches (10+) over the next 6-7 years (incl. 6 new EVs and Hybrid models). Near-term demand momentum is expected to be driven by the CNG/UV portfolio. The benefit of richer portfolio mix and higher operating leverage is expected to support margins going ahead. We estimate revenue/EPS CAGR of 13%/16% over FY24-27E,” it said.
Motilal Oswal
Motilal Oswal reiterated its ‘Buy’ rating on Maruti Suzuki with a target price of Rs 15,160.
“We have marginally tweaked our estimates. We expect MSIL to continue to outperform industry growth over FY25-26E. While the bulk of input cost benefits are likely to be over, we expect MSIL to post a 90bp margin improvement to ~12.5% in FY25E, largely led by an improved mix. This would in turn drive a steady 15% earnings CAGR over FY24-26E,” Motilal said.
“Any GST cut or favorable policy for hybrids by the government may drive a rerating as MSIL would be the key beneficiary,” it said.
BofA
Bank of America (BofA) maintained a ‘Neutral’ rating on Maruti Suzuki and has hiked the target price to Rs 14200 from Rs 13800.
The company reported a strong margin delivery in Q1 which is likely to sustain ahead. According to BofA, the recovery in the mass segment will be key to the stock’s performance. Analyst call: Domestic demand soft, positive on exports and CNG vehicles.
Emkay
Emkay retained its ‘Reduce’ rating on Maruti Suzuki and has hiked the target price to Rs 12,000 from Rs 11,200.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)