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Dolat Capital Report
Maruti Suzuki India Ltd.'s displayed strong margin performance in Q2. Operating profit margin expanded 368 basis points QoQ to 12.9% led by better product mix (utility vehicles volume share stood at 35%). Expect strong Q3 led by channel filling and festive season demand.
Entry-level car demand is showing weakness, leading to offering higher discounts while SUV segment is on strong footing, Festive season passenger vehicle's growth is 18% YoY till date.
We continue to maintain a positive view on Maruti Suzuki led by improving product mix, gaining market share in SUVs and expansion in operating margin.
We increase earnings per share by 19/11% for FY24/25E factoring in sharp expansion in margin.
We estimate 22% EPS CAGR over FY23-26E. Maintain 'Accumulate' with target price Rs 11552 (25 times September-25E).
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