Maruti Suzuki Q4 Results Review: Brokerages Mixed; Margin Pressure And New Launches In Focus

Brokerages weighed in on Maruti Suzuki India Ltd. following its Q4 FY25 results, with mixed views on margin pressure and the impact of new launches. While some maintain a cautious outlook, others remain optimistic about future growth.

Maruti Suzuki India Ltd.'s net profit fell 4% in the fourth quarter of fiscal 2026, meeting analysts' estimates. The standalone net profit was Rs 40,673 crore, while revenue rose 6.4% to Rs 40,673 crore. Analysts had estimated the top line at Rs 40,929 crore and the bottom line at Rs 3,857 crore.

JPMorgan maintained a 'neutral' rating on Maruti Suzuki with a target price of Rs 12,800. "Results were a miss (14% lower Earnings Before Interest and Taxes versus JP Morgan estimates) despite lower discounts (40 basis points quarter-on-quarter) and operating leverage (volumes grew 7% quarter-on-quarter)."

Key factors behind the miss included new plant ramp-up, weaker mix/commodity headwind, higher advertising, and some lumpy and seasonally higher costs.

Fiscal 2026 could be weaker than FY25 as the company continues to ramp up its new plant in an environment where volume growth could remain soft, according to the brokerage.

"The company maintained a cautious tone on the FY26 outlook, expecting muted domestic demand with affordability constraints in the industry."

Jefferies retained a 'buy' rating with a revised target price of Rs 13,600. "Maruti Suzuki's fourth-quarter Ebitda fell 9% year-on-year and was 16% below Jefferies estimates, led by lower margins," the brokerage said.

Maruti is targeting 20% growth in exports in FY26, which can partly offset the headwinds in domestic business, the brokerage noted.

The brokerage also highlighted that Maruti will launch a new SUV, besides e-Vitara, in FY26.

They cut their fiscal 2026-2027 passenger vehicle industry volumes by 2-3%, but still expect an 8% compound annual growth rate over fiscal years 2025-2028.

"We cut Maruti Suzuki India Limited's fiscal year 2026-2027 Earnings Per Share by 6-8% mainly factoring lower margins," they added.

BofA maintained a 'buy' rating with a target price of Rs 14,000. "There was small pressure from metals/raw material (20 basis points quarter-on-quarter)."

Looking into the first quarter, the brokerage expects some rebound in margins, but believes new plant-related costs will remain a headwind for one or two quarters until plant utilisation ramps up.

"We lower our margin expectation by 50-80 basis points to factor high plant-related fixed cost," they stated. Earnings per share for Maruti Suzuki is projected to decrease by 6% for the fiscal 2026 and by 4% for the fiscal 2027.

"Maruti's management commentary and earnings calls tend to be conservative and this one was no different with PV industry guide of 1-2%, sounding caution on first time buyer affordability," it said.

The company expects export volume to grow by 20% in FY26E, it said in its earnings con call. e-Vitara and a new ICE SUV are expected in FY26E.

Moreover, e-Vitara sales are expected to start within H1FY26 and volume in FY26 is expected to be at 70,000 units, with a large part from exports.

The company took a price hike in April 2025 to offset regulatory cost increases and inventory stood at 28 days at the end of FY25.

Management expects the policy on Café 3 norms to come out within the next two months.