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Target: ₹15,145
CMP: ₹12,730.95
Maruti Suzuki India’s Q1-FY25 standalone revenue grew by 9.9 per cent y-o-y driven by strong volume growth. Gross profit grew by 20.5 per cent y-o-y, while margin expanded by 262bps y-o-y to 29.8 per cent, benefitting from better operating leverage, product mix and favorable commodity prices.
Strong overall performance led APAT to expand by 46.9 per cent y-o-y. As the sluggishness in entry-level/small car segment continues, the management anticipates the contribution of UVs in industry and in its portfolio to continue to increase. As it is increasing its capacity and strategically planning its portfolio in hybrids and CNG categories, we expect MSIL volume to grow at a CAGR of 7.5% over FY24-26E
We continue to remain bullish on MSIL given consistent mix improvement in its UV portfolio in domestic and international markets, capacity expansion with multi-powertrain options, premiumisation trend coupled with rising disposable income and improved supply chain and revival in spending, which could further aid in volume expansion.
We retain our ‘Buy’ rating with a target price of ₹15,145 (previous ₹14,432) valuing the company at 26x on its FY26E EPS.
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