Maruti Suzuki India Ltd.'s market share is likely to remain stable in the ongoing fiscal as stagnant small car markets may offset growth in the SUV segment even as the carmaker outperforms overall industry performance, analysts said.
The country's largest carmaker has guided for flat growth for the small car segment in FY24, highlighting higher prices due to regulatory interventions and a rise in commodity costs. This will offset any further market share gains that the company may witness in the SUV market, helped by new launches such as the Fronx and Jimny in the segment, analysts said.
In the quarter ended March, Maruti Suzuki saw its profit grow 43% on higher sales and a rising share of SUVs in the portfolio.
While Maruti Suzuki will gain share in SUVs in FY24, the falling share of the small car segment will drag the overall market share, Nomura said.
The brokerage sees the market share stable at 42%, with risks of it falling to 41% unless the hatchback segment picks up.
Shares of the automaker rose 0.05% to Rs 8,511.05 as of 9:20 a.m., compared with 0.02% decline in the benchmark Nifty 50.
Out of the 51 analysts tracking the company, 37 maintain a 'buy' rating, seven recommend a 'hold' and seven suggest a 'sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 20.%.
Here's what analysts made of Maruti Suzuki's performance in the fourth quarter:
Nomura
Retain 'neutral' rating with a target price of Rs 9,659 per share, implying an upside of 13.5%.
Expect further weakness in the small car segment and trim FY24-FY25 volume growth estimates by 2%.
As inventory rises and growth slows, advertising and promotional spends may rise, offsetting gains from a larger scale of production.
An accelerated shift to EVs may benefit rivals like Tata Motors Ltd. and Mahindra & Mahindra Ltd.
Morgan Stanley
Remain 'overweight' with a target price of Rs 11,155 a share, a potential profit of 31%.
Maruti Suzuki could grow ahead of the market at 12% in FY24, compared with 8% for the industry.
Expect the product mix to improve as the company scales its SUV portfolio.
A higher scale of production and an improved mix may drive margin expansion.
Elara Capital
Maintain 'buy' rating with a target price of Rs 11,775 per share, an implied upside of 38%.
Expects the company's market share to improve to 45–46% in FY24 on incremental volumes from Fronx, Jimny, Grand Vitara, and Brezza.
Higher-priced new model launches will push up the average selling price, propping up the margin per vehicle.
Expect a volume compounded growth rate of 14% in FY23–FY25.
Motilal Oswal
Maintain a "buy' rating with a target price of Rs 10,100 per share implies a profit potential of 19%.
Driven by new products, the company is expected to outperform industry growth, resulting in market share gains and margin recovery.
Stable domestic growth and a favourable product lifecycle augur well for the company.
Chip shortages and commodity inflation could pose risks to estimates.
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