Motilal Oswal Maintains Buy Rating on Maruti Suzuki with Target Price of Rs 15,529

Maruti Suzuki Posts Lower 4QFY26 Profit Amid GST Rate Cut Boost

Maruti Suzuki (MSIL) reported a decline of approximately 7% year-over-year (YoY) in its profit after tax (PAT) for the fourth quarter of fiscal year 2026 (4QFY26), settling at INR35.9 billion. This figure fell short of Motilal Oswal's estimate of INR40 billion, primarily due to a mark-to-market (MTM) loss on the company's investment book.

Despite this setback, MSIL's operational performance remained in line with expectations. The recent GST rate cut has revitalized demand for small cars, making them more affordable for price-conscious consumers. This shift has contributed to a significant order backlog of 190,000 units, bolstering the company's confidence in achieving a 10% volume growth in the domestic market for fiscal year 2027 (FY27E). This growth is expected to drive market share recovery for MSIL and, in turn, drive a stock re-rating.

A healthy demand outlook is anticipated to counterbalance near-term cost headwinds. Motilal Oswal projects MSIL to deliver a 16% earnings compound annual growth rate (CAGR) over the period of fiscal years 2026-2028 (FY26-28). The research firm has reemphasized its BUY rating for MSIL, with a target price (TP) of INR15,529. This valuation is based on a price-to-earnings (P/E) ratio of 25 times estimated earnings per share (EPS) for fiscal year 2028 (FY28E).

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Note: The table presents a comparison of estimated earnings per share (EPS) for fiscal year 2028 (FY28E) and current price-to-earnings (P/E) ratio for Maruti Suzuki (MSIL).