The share price of Maruti Suzuki India, the country’s largest carmaker by market share, fell 2.18% to a low of Rs 13,923 on the NSE after the company’s Q1 FY27 results. Brokerage houses are confident about the demand outlook but continue to be cautious over the persistent margin risks, given the commodity price swings.
Nomura on Maruti Suzuki: Neutral
The global brokerage house Nomura raised the price target on Maruti Suzuki to Rs 14,071 from Rs 13,435, but still implies a downside of 1.1%, while maintaining a ‘Neutral’ rating. “We prefer M&M and Hyundai Motor among four-wheeler OEMs,” said Nomura.
The brokerage said it expected below-consensus earnings in Q1 due to cost pressures and a slightly weaker mix. They believe the drop in commodity rates would be a key catalyst for margin improvement. “We also factor in a 1-2% price hike over the rest of FY27,” said Nomura.
For Maruti Suzuki, the brokerage believes production can be ramped up faster than guidance given past track record.
However, as car prices go up, risks to the small car segment where consumers are more price sensitive will be monitored
In the medium term, Maruti Suzuki will face market share risks if the industry’s EV growth is much faster, as its EV market share is likely to be much lower than 40%.
Motilal Oswal on Maruti Suzuki: Buy
Motilal Oswal Financial Services maintained its ‘Buy’ rating on Maruti Suzuki with a price target of Rs 17,064, implying an upside of over 20% from the current market price. The retention of the rating as the brokerage finding the demand outlook remained upbeat.
“We expect Maruti Suzuki to sustain its outperformance in FY27, aided by a healthy launch pipeline, revival in car demand, lean inventory, and ramp-up of its two new facilities,” said the brokerage house.
A sustained market share recovery is likely to, in turn, drive the stock re-rating. Further, after a relatively weak Q1, margins are expected to normalise, given the moderating raw material costs and steady volume growth.
“We expect the company to deliver a 20% earnings CAGR over FY26-28,” said Motilal Oswal.
Maruti Suzuki Q1FY27
The company posted a net profit of Rs 3,446.9 crore in the first quarter of FY27, compared with Rs 3,792.4 crore in the same period a year ago, a drop of 9% year-over-year.
However, its revenue from operations surged 36% YoY to Rs 52,469.8 crore in Q1 FY27 from Rs 38,605.2 crore in the corresponding quarter a year ago.
The company said its total sales volume increased 29.3% during the first quarter compared with the same period of the previous financial year.
Maruti Suzuki’s domestic small car sales grew by 34.1%, SUVs by 44.6% and exports by 28.6%. The company’s domestic market share of the company increased by 2.3 percentage points to 41.2%.
The automaker attributed the higher sales volume to increased production capacity.
Maruti Suzuki share price performance
The share price of Maruti Suzuki has risen 4.6% in the last five trading days. The stock has changed a little over the past one month and has declined 3.7% in the last six months. Maruti Suzuki’s share has delivered a return of more than 15% in the last 1 year.