Motilal Oswal Sees Potential for Maruti Suzuki Stock to Reach Rs 17,406

Motilal Oswal Research Report: Maruti Suzuki

Key Findings

Maruti Suzuki India Limited (MSIL) has underperformed the Auto index in recent times, driven by near-term wholesale underperformance and disappointing 3Q performance. However, our analysis suggests that these concerns may be overstated.

Retail Demand and Capacity Constraints

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Despite near-term wholesale constraints, retail demand for MSIL remains healthy, with strong sales in both cars and utility vehicles (UVs). The company's outperformance in retail sales post-GST cut is a positive indicator. Additionally, MSIL's capacity constraints are expected to be alleviated from April 2026, as its new capacity comes online.

Launch Pipeline and Export Momentum

We expect MSIL to outperform industry growth in FY27, driven by a healthy launch pipeline, which includes a new Brezza variant, the recently launched Victoris and e-Vitara, and at least one more new launch in FY27E. The company's export momentum is also expected to remain healthy, with a medium-term target of 750,000-800,000 vehicles by FY31. MSIL has already surpassed its FY26 export target in February 2026.

Outlook and Valuation

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We forecast a 16% earnings compound annual growth rate (CAGR) for MSIL over FY25-28E. Based on this outlook, we reiterate our BUY rating on MSIL with a target price of INR 17,406, valued at 26x December 2027 earnings per share (EPS).