Maruti Suzuki Q3 Review: Better Margin Outlook, EV Push Has Analysts Bullish, Stock Up

Maruti Suzuki India Ltd.'s in-line third quarter earnings have kept brokerages bullish on the company, as they see improvement in operating margin going ahead and strong focus on electric cars bolsters growth outlook.

Analysts have maintained their ratings and revised share price targets.

BofA Securities reiterated a 'buy' rating with a target price of Rs 14,000, expecting improvements in volumes and margins despite a small miss in the December quarter. The firm noted that discount drag was not significant and projected better March quarter margins.

"Whilst recent volume pick up has come at high discounts, we draw comfort from the underlying pent-up demand in the industry and receding drag from the hatches segment," it said.

BofA called Maruti Suzuki's EV strategy "comprehensive", with focus on charging infra, exports to afford scale and service support.

CLSA maintained an 'outperform' rating on Maruti Suzuki, raising its target price to Rs 13,446 from Rs 12,631 per share. It highlighted a miss on Ebitda margin due to higher sales promotion expenses, which impacted margins by 60 bps sequentially.

Citi also retained a 'buy' rating with a target price of Rs 13,700, despite a slight earnings cut due to margin pressures from elevated advertising costs and adverse forex trends.

The brokerage highlighted stronger rural demand over urban sales in third quarter and expects retail growth to align with the nine-month run rate of 3.5%. Maruti’s strong focus on EVs, including the recently launched e-Vitara, and the positive response to the new Dzire further bolster its growth outlook. Citi continued to view Maruti as its top sector pick.