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Shares of Maruti Suzuki India hit a four-month high of Rs 13,431.60, as they rallied 4 per cent on the BSE in Monday’s intra-day trade in an otherwise weak market on a healthy outlook. In the past four trading days, the stock has surged 12 per cent. Currently, it is trading at its highest level since September 30, 2024. The stock had hit a 52-week high of Rs 13,675 on August 1, 2024.
At 09:23 AM, Maruti Suzuki was quoting 2 per cent higher at Rs 13,174.75 on the BSE. In comparison, the BSE Sensex and BSE Auto index were down 0.75 and 0.44 per cent, respectively.
Maruti Suzuki is the market leader in the domestic passenger vehicles (PV) space with a market share pegged at around 41.7 per cent as of FY24, on the back of popular models, including WagonR, Swift, Brezza, Baleno, Ertiga, and Fronx, among others.
The government has announced a major overhaul in personal income tax structure, thereby increasing the tax exemption income from Rs 7 lakh to Rs 12 lakh in the Union Budget 2025-26. This tax relief is expected to increase disposable income in the range of Rs 30,000 –1,10,000 in the hands of taxpayers, thereby providing a big booster for the auto space given the people will upgrade their standard of living by potentially buying new vehicles, which can either be a 2-wheeler or a 4-wheeler.
This can benefit in two ways. It can lead to an increase in the sales volume of entry level cars; more first time buyers can now afford small cars. Apart from that, due to the premiumisation trend underway, existing buyers may stretch their budgets, and upgrade from hatchbacks to compact SUVs, ICICI Securities said in a note. ALSO READ: Eicher Motors pops 3%, hits record high on strong Jan sales, robust outlook
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Although India is the world’s third largest passenger vehicle market, car penetration still remains low compared to the global average, and developed economies in the West and China. With rising per capita income domestically, this presents a healthy long-term growth longevity for domestic PV space, with Maruti Suzuki a clear beneficiary. With exports gaining traction and under penetration in domestic PV space, Maruti Suzuki is poised to benefit. Exports are seen growing better for Maruti Suzuki vs. domestic volumes, the brokerage firm said.
Meanwhile, in January 2025, Maruti Suzuki India sold a total of 212,251 units, which is its highest ever monthly sales volume. Total sales in the month include the highest ever monthly domestic sales of 177,688 units, sales to other OEMs of 7,463 units, and exports of 27,100 units.
India would be the global production hub for the recently-unveiled E-Vitara; Maruti Suzuki would export to 100 countries, and aims to be the leader in electric vehicles (EVs) in production volume terms, in the first year. Soft near-term outlook on macros prevents us from turning more constructive on Maruti Suzuki, says analysts at Emkay Global Financial Services. However, they continue to prefer it within PVs on a relative basis, amid potential catalysts in the form of greater launch visibility, ICE SUVs in FY26E, small car recovery optionality, E-Vitara launch including exports, and reasonable valuations (trades marginally below its long-term average), they said.
Analysts at DRChoksey FinServ Private expect Revenue/EBITDA/Adjusted PAT to grow at a compound annual growth rate (CAGR) of 12.0 per cent/10.8 per cent/11.4 per cent, respectively, over FY24-FY27E. The brokerage firm maintains its FY26E/FY27E EPS estimates, on the back of robust export growth and strategic investments in EVs and capacity expansion, which are expected to fuel future growth. Additionally, stronger demand from rural markets is anticipated to support increased hatchback sales. Maruti Suzuki’s focus on expanding exports, growing CNG vehicle sales, and launching hybrid and CV models will contribute to long-term margin expansion and bolster the company’s market share. The brokerage firm maintains a ‘Buy’ rating on the stock, with a target price of Rs 14,234 per share.
