Maruti Suzuki's Q2 FY26 Ebitda margin at 10.5% was in line with Bloomberg consensus estimate of 10.6%, but above the brokerage's estimate of 10.2%. Bank of Baroda's Q2 FY26 earnings were in line with estimates, driven by a relatively softer operating performance, offset by improvement in asset quality.
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HDFC Securities Instituitional Equities
Maruti Suzuki - Reinforces 50% market share goal: to launch 8 UVs in 5-6 years
Maruti Suzuki India Ltd.'s Q2 FY26 Ebitda margin at 10.5% was in line with Bloomberg consensus estimate of 10.6%, but above our estimate of 10.2%. We expect margins to improve going forward as capacity utilization improves on the back of higher passenger vehicle demand, ramp-up of the Victoris model, and increasing exports.
We expect exports to continue to do well over the medium term, benefitting from the company's efforts over the last few years to improve penetration across markets, including developed markets, and with a wider portfolio and improving mix.
We value the company at 27x Sep-27 EPS for a target price of Rs 18,607 and maintain a Buy rating.
Bank of Baroda - Stronger margin profile essential to earnings reflation
Bank of Baroda's Q2 FY26 earnings were in line with estimates, driven by a relatively softer operating performance, offset by improvement in asset quality.
Deposit growth came in at 10% YoY as domestic CASA ratio clocked in at 38.3% (-90bps QoQ). Loan growth was healthy (+12% YoY; +6% QoQ), driven by RAM (retail, agri, and MSME) segments.
NIMs increased slightly (+5bps QoQ), with interest from the IT refund contributing Rs 7.5 billion, which was higher than typical. Asset quality improved as slippages were lower across segments.
However, we continue to remain cautious on the retail and MSME portfolio quality and flag an elevated loan-to-deposit ratio (84%) compared to other PSBs.
Despite its handicap of relatively softer NIMs on the back of a large overseas portfolio (18% of loans), BOB has consistently delivered better return ratios than peers, largely on the back of lower credit costs and superior customer franchise.
We reiterate Buy on BOB, with a revised target price of Rs 320 (1.0x Sep-27 adjusted book value per share).
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