Maruti Suzuki India Ltd. share price target

*over or under performance to benchmark index Maruti Suzuki India Ltd. (MSIL) is an automobile manufacturer, in which Japanese car and motorcycle manufacturer Suzuki Motor Corporation owns 56.2%. MSIL is one of...

MSIL sold 604,635 vehicles during Q4FY25, up by 3.5% YoY driven by domestic volume (+2.8% YoY), and export volume (+8.1% YoY). Revenue stood at INR 409,201 Mn, up by 6.4% YoY (+5.6% QoQ), which was below our estimates by 2.1%, driven by lower-than expected realizations.

We maintain our HOLD rating on the stock.

MSIL reported muted Q4FY25 performance with lower than anticipated realizations and high other expenses weighed in on overall profitability. Its standalone revenue grew by 6.4% YoY, marginally lower than PLe while it was in-line with consensus estimates. Realization increased by 2.8% YoY, however, UV mix declined sequentially leading realization to decline by 1% QoQ. Gross profit increased by 4.5% YoY while margin contracted by 50bps YoY to 28.1%. Higher other expenses due to the new SMG plant dragged EBITDA lower by 9%...

MSIL reported ~9% YoY/5% QoQ lower EBITDA on Kharkhoda plant costs, higher advertising, and lumpy other expenses; margins declined by 113bps QoQ to 10.5%, with underlying margins adjusted for lumpy expenses at ~11.4% (~5% miss vs Consensus).

Maruti Suzuki’s Q4 standalone EBITDA declined 9% y/y to Rs42.6bn, below our estimated Rs49.3bn. Domestic volumes would clock a 5% CAGR over FY25-27 due to higher income levels (income-tax cuts), a rebound in first-time buyers, rural demand, launches and lower finance costs.

Maruti Suzuki (MSIL)’s 4QFY25 margin came in 110bp below our estimate at 10.5%, largely due to the lumpy nature of multiple costs that affected its performance.

Company Update

MSIL’s (Maruti Suzuki India Ltd) Q3FY25 performance was decent with revenue inline of estimates, while EBITDA margin beat expectations with q-o-q rise in gross margins.

We maintain our HOLD rating on the stock.

Maruti Suzuki India (MSIL) reported an in-line performance during 3QFY25. Margin dilution in Q3 was restricted to 30bps QoQ despite the rise in discounts due to favorable operating leverage benefits.

Broadly in line with our estimate, Maruti Suzuki’s Q3 standalone EBITDA grew 14% y/y to Rs44.7bn. Domestic volumes would clock a 6% CAGR over FY25-27 due to higher income levels, rebound of firsttime buyers, rural demand, launches and greater support by financiers.

We estimate a forward P/E multiple of 25x based on FY27E EPS of Rs 570, resulting in a target price of Rs 14,250 per share.

EBITDA margin missed estimates on a 130 bps y-o-y contraction in gross margins.

MSIL, sold 541,550 vehicles during Q2FY25, declined by 1.9% YoY (+3.8% QoQ). Revenue for the quarter stood at INR 374,492 Mn, up by 0.3% YoY/ (+4.7% QoQ), which is in line with our estimates.

Q2FY25 revenue was flat YoY (+5% QoQ) in a challenging quarter, realisation improved by 2%/1% YoY/QoQ

We maintain our HOLD rating on the stock

We summarize below the key takeaways from MSIL’s FY24 Annual Report. MSIL will continue to partner with India on its ambitious Viksit Bharat initiative.