Maruti Suzuki Stock Rises 4% Following Q4 Earnings Release Amid Varied Brokerage Outlook

Maruti Suzuki Shares Jump 4% After Mixed Q4 Performance

Maruti Suzuki India Ltd shares surged over 4 percent on Wednesday, recovering from yesterday's loss, following the automaker's mixed Q4 financial performance. The company's shares were trading at Rs 13,365 in the early morning session, a 3.67 percent increase. Yesterday, the stock closed at Rs 12,890, down 2.51 percent.

Market Performance

The automobile stock has outperformed the Nifty 50 over the past one year, with a gain of 8.9 percent, while the Nifty 50 is down 0.4 percent over the same period. Maruti Suzuki has a market capitalisation of around Rs 4.5 lakh crore.

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Maruti Suzuki reported a complex Q4 financial performance, with a 6.5 percent year-on-year decline in consolidated net profit to Rs 3,659 crore. However, revenue rose 28.2 percent to Rs 52,462.5 crore. The earnings were impacted by higher raw material costs, lower other income, and increased tax outgo, offsetting strong volume growth. On a standalone basis, net profit fell 7 percent, while margins remained largely flat at 11.7 percent.

Operationally, Maruti Suzuki reported its highest-ever quarterly sales volume, with exports hitting record levels. Net sales crossed the Rs 50,000 crore mark for the first time. However, profitability was impacted by adverse commodity costs and lower non-operating income, even as operating profit saw healthy growth.

Two major brokerages, HSBC and Jefferies, have released their views on Maruti Suzuki India stock. HSBC retained a 'buy' rating on the stock with a target price of Rs 15,000, citing in-line performance and the company's ability to manage commodity inflation. The brokerage expects volume growth guidance of around 10 percent to reflect a resilient demand environment. Further, it believes valuations at 20 times FY28 estimated earnings remain undemanding. HSBC also sees Maruti as a key beneficiary of the 8th Pay Commission.

In contrast, Jefferies maintained a 'hold' rating with a target price of Rs 13,800. It stated that while EBIT grew 30 percent year-on-year in Q4, net profit declined due to lower financial income. The brokerage flagged concerns around market share erosion to a 13-year low amid a structural shift towards SUVs. Jefferies cut its FY27-28 earnings estimates by 9 percent, even as it expects domestic passenger vehicle demand to remain strong with around 10 percent volume growth.

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