Maruti Suzuki India Ltd. share price target

Q2 volume growth of ~7% YoY continued to beat the industry (~5%); we expect sustained outperformance

Maruti Suzuki (MSIL) reported EBITDA margin of 12.9%, up 370bps QoQ in Q2FY24, higher than consensus estimate of ~11%, driven by gross margin improvement of ~220bps (due to superior product mix) and operating leverage. ASP was up 3% QoQ at ~INR 670k/unit with blended discount up ~INR 1.5k/unit QoQ (INR 17.7k/unit).

Maruti Suzuki (MSIL) has reported EBITDAM of 9.2%, down 130bps QoQ, despite 50bps QoQ improvement in GM, as 80bps non-recurring expenses under staff cost impacted margins in Q1FY24. ASP was up 4% QoQ to INR 650k/unit with blended discount being up ~INR 3k/unit QoQ. EBITDA came in at ~INR 30bn vs consensus estimate at INR 32.5bn.

We maintain our BUY rating on the stock and value it at 27xP/E of its Jun'25E EPS (roll forward from FY25 EPS)