Maruti Suzuki's Strong Q3 Performance Boosts Broker Confidence

resr 5paisa Research Team

Last Updated: 30th January 2025 - 04:54 pm

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Maruti Suzuki exhibited solid growth in Q3 despite a slowdown in demand, instilling confidence among brokerages regarding its future prospects.

As of 09:23 am IST, the stock was trading at ₹12,030 on the NSE. Following its Q3 earnings announcement, Maruti Suzuki's shares opened 1% higher. 

The company's consolidated net profit for Q3 FY25 rose 16% year-on-year to ₹3,727 crore, surpassing Moneycontrol’s projection of ₹3,596 crore. Revenue increased by 16% to ₹38,764 crore compared to the previous year, though it fell slightly short of the forecasted ₹38,838 crore.

Operationally, the EBITDA margin dipped marginally to 11.6% from 11.7% in Q3 FY24. This decline was widely expected, given the higher discounts and increased expenditure on advertising and promotions. However, Maruti Suzuki mitigated these impacts through a stronger product mix, higher average selling prices, and operational efficiency gains.

Brokerage firms remain largely optimistic about the company's performance. Morgan Stanley commended Maruti Suzuki's margin resilience amid tepid demand and maintained an ‘overweight’ rating with a price target of ₹14,942.

Similarly, CLSA increased its price target by 6.5% to ₹13,446 while retaining its ‘outperform’ rating, citing positive expectations for CNG car demand.

Nuvama Institutional Equities views the upcoming launch of Maruti's e-Vitara and a gradual recovery in hatchback demand as key volume drivers. The firm projects a total volume (domestic + exports) of 72,000 units in FY26 and anticipates a revenue and EBITDA CAGR of 11% and 10%, respectively, over FY25–27. Nuvama reaffirmed its ‘buy’ call with a price target of ₹13,900.

Macquarie, however, remains more cautious, emphasizing the impact of BEV volume trends and price hikes on demand. The brokerage has a ‘neutral’ rating with a price target of ₹12,296.

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