Mirae Asset Sharekhan has reaffirmed its ‘Buy’ rating on Maruti Suzuki India Ltd (MSIL) with a revised price target of Rs 14,500, reflecting strong earnings growth, resilient export performance, and the company’s foray into electric vehicles (EVs).

MSIL delivered a strong Q3FY25 performance, with revenue rising 15.6% year-over-year (YoY) to Rs 38,492 crore. EBITDA margin stood at 11.6%, outperforming estimates due to better gross margins and operating leverage.

Key growth drivers include higher retail sales, strong export momentum, and the upcoming launch of the e-Vitara EV. However, entry-level car demand remains sluggish, and discounting levels have increased. The company expects 3-4% retail sales growth in FY25.

Sharekhan maintains a positive outlook on Maruti’s stock, citing stabilization of operating performance and structural improvements in its product mix.

Q3FY25 Performance: Key Financial Metrics

Maruti Suzuki reported strong revenue growth, stable profitability, and robust volume expansion in Q3FY25.

Quarterly Financial Snapshot (Standalone)

Key Takeaways
Revenue increased by 15.6% YoY, driven by 13% volume growth and a 2.3% rise in realizations.
EBITDA margin was 11.6%, down 10 bps YoY, but gross margin improved 30 bps quarter-over-quarter (QoQ).
Other income declined 33.2% YoY, due to lower forex gains from yen depreciation.
PAT rose by 12.6% YoY, but fell 9.8% QoQ due to higher discounts and lower other income.

Key Growth Drivers for Maruti Suzuki

1. Expansion in Retail Sales and Market Share
Retail sales grew 3.5% YoY in 9MFY25, and a similar growth trend is expected in Q4FY25.
Rural demand outpaced urban demand, with rural retail sales growing 15% YoY, while urban retail growth was only 2.5%.
2. Export Performance Strengthens
Exports grew significantly across Africa, Latin America, the Middle East, and ASEAN markets.
Maruti Suzuki now holds a 49% share of India’s total passenger vehicle (PV) exports.
The e-Vitara EV is planned for exports to over 100 countries, boosting international revenue streams.
3. Entry into the EV Market with e-Vitara
Maruti Suzuki is set to launch its first EV, the e-Vitara, which has generated positive anticipation.
With increasing EV adoption in India, Maruti aims to leverage its extensive distribution network to capture market share.

Stock Valuation and Financial Projections

Standalone Valuation Estimates

Valuation Insights
MSIL is currently trading at a P/E multiple of 22.3x FY27E earnings, making it attractively valued.
The stock’s EV/EBITDA multiple is 15.0x, reflecting growth potential.
Sharekhan maintains a BUY rating with a price target of Rs 14,500, implying a potential upside of ~14% from the current price of Rs 12,763.

Key Risks to Consider

1. Slower Demand for Entry-Level Cars
While SUVs are seeing strong demand, the entry-level car segment remains weak.
Higher discounting may continue pressuring margins in this segment.
2. Rising Raw Material Costs
Fluctuations in raw material prices can impact EBITDA margins, especially with rising steel and lithium costs affecting EV production.
3. Execution Risk for EV Launches
The success of Maruti Suzuki’s EV lineup will be crucial in determining its future market position.
Any delays or weak adoption may hinder growth expectations.

Conclusion: A Strong Growth Play with a Positive Outlook

✅ Maruti Suzuki remains India's largest passenger vehicle manufacturer with a 41% market share.
✅ Expansion into EVs and international markets supports long-term growth.
✅ Stable financial performance and attractive valuations reinforce its investment potential.
❌ Challenges in entry-level car demand and rising discounting pressures remain concerns.