Maruti Suzuki's Target Price Hiked By Investec, GST Rate Cuts, SUV Push Fuel Bullish Outlook

Investec has hiked its target price for Maruti Suzuki India Ltd. to Rs 18,475 from earlier Rs 13,980. The brokerage believes that the company is well placed to benefit from the anticipated demand upturn driven by GST rate rationalisation and monetary easing measures, given its higher exposure to to the price-sensitive small car segment.

It further noted that, "the recent launch of Victoris should in our view strengthen Maruti's presence in the fast-growing mid-size SUV space, where it currently has a modest share. Additionally, implementation of the 8th pay commission from 2026 should help Maruti."

Rationalisation in GST rates should provide a much-needed flip to overall auto demand, particularly in the small car and entry-level SUV segment. Maruti, being a dominant player here, would be a primary beneficiary, the brokerage said.

"Moreover, additional discounts by Maruti in select models would give an added impetus to overall sales," Investec said.

Moreover, strong demand momentum for key SUV models, ramp-up of E-Vitara volumes, foray into developed economies (markets such as Japan and Europe), increasing focus on making India as a global production hub and planned capacity expansion should support export growth, the brokerage said.

The brokerage noted that the company is currently valued at 29 times its projected earnings per share for the financial year ending in 2027 (FY27E Price-to-Earnings ratio), which is slightly above its five-year average of 28 times. This suggests that the valuation is still reasonable and supportive.

On Monday, Goldman Sachs upgraded the rating for the company to Buy and hiked target price. The brokerage raised its target price to Rs 18,900 from Rs 13,800 apiece.

Goldman Sachs did so on the expectations that there will likely be a pickup in the market for entry-level cars after Maruti Suzuki India changed prices post GST cuts. The new simplified rate structure for rate cut came into effect on Monday.