Broker’s Call: Maruti Suzuki (Buy)

Why It Matters

The outlook signals upside for India’s leading carmaker as it leverages higher‑margin models and an expanding EV portfolio, offering investors a compelling growth narrative amid a competitive automotive market.

Key Takeaways

• Q4 revenue rose 28% YoY, volume up 12% YoY.
• EBITDAM fell to 11.7%, margin pressure from commodities.
• FY27 domestic passenger‑vehicle volume target 10%, above industry.
• Orderbook 190k units, low inventory 12 days, supports growth.
• New plants add 500k annual capacity, enabling higher‑end and EV models.

Pulse Analysis

5 million) and vehicle volumes expanding 12 % YoY. 7 %. The company’s profit after tax missed forecasts after a one‑off ₹750 crore (≈ $90 million) loss on other income. Emkay Global now rates the stock a Buy with a target of ₹16,200 (≈ $195) versus the current ₹13,260 (≈ $160).

Looking ahead, Maruti aims for a 10 % rise in domestic passenger‑vehicle volumes in FY27, outpacing the industry’s 5‑7 % forecast. A healthy orderbook of 190 k units—130 k of them small‑car models—combined with an inventory turnover of just 12 days positions the firm to meet demand without excess stock. Two new plants, each capable of 250 k units per year, will add 500 k annual capacity, supporting a pipeline that includes seven new SUVs and a growing electric‑vehicle lineup. Management expects modest margin recovery as higher‑end models and EVs lift ASPs.

The buy recommendation rests on a 28× FY28 core price‑to‑earnings multiple, implying a valuation uplift of roughly 22 % from today’s price. With commodity pressures still eroding margins, Maruti’s strategy of expanding higher‑margin SUVs and accelerating its EV rollout offers a clear path to earnings growth. Investors benefit from the company’s strong brand equity, extensive dealer network, and disciplined inventory management, which together cushion against macro‑headwinds such as the West Asia conflict. As the Indian auto market pivots toward premium and electric segments, Maruti’s execution could set the benchmark for peers.