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Motilal Oswal Report
Motilal Oswal expects a meaningful re-rating for Maruti Suzuki India Ltd. as market share recovery, new model launches, and easing capacity constraints set the stage for a strong growth phase from FY27 onward.
According to the brokerage, Maruti Suzuki's recent underperformance versus the Auto index can be attributed to two key factors:
- near-term underperformance in wholesale and
- disappointing Q3 performance.
However, Motilal Oswal believes these concerns are 'overdone,' noting that retail demand remains robust across both the passenger car and UV segments. This strength is evident in Maruti Suzuki's post–GST-cut outperformance in retail sales.
Further, its near term wholesale has been capped by capacity constraints, which is likely to be addressed from Apr'26 onwards as its new capacity comes on stream.
The brokrerage expects the company to outperform industry growth in FY27, aided by its healthy launch pipeline, which includes:
- a new Brezza variant,
- the recently launched Victoris and e-Vitara, and
- at least one more new launch in FY27E.
Further, its export momentum is likely to remain healthy as it works towards its medium-term target of 750,000–800,000 vehicles by FY31 – it has already surpassed its FY26 target in Feb26.
Moreover the brokerage expects the increase in input cost pressure to be offset by reducing discounts, improving mix, and normalizing pricing in cars.
Overall, Motilal Oswal factors in Marut Suzuki to post 16% earnings CAGR over FY25-28E and reiterates Buy rating on the company with a target price of Rs 17,406, valued at 26x Dec'27E earnings per share.
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