Maruti Suzuki shares opened in the green after Q2 results missed expectations.

What Happened: In its Q2 results, Maruti Suzuki’s net profit declined 17.41% year on year to ₹3,069.2 crore, missing analyst estimates. India's top car maker's revenue was flat at ₹37,202.8 crore, which met the street's expectations. 

The company's sales volume in Q2 went down 1.9% to 5.42 lakh units compared with 5.52 lakh units in the previous year. 

Brokerage Views: Nomura kept a "neutral" call on the company with a target price of ₹12,455. The brokerage said concerns about weak demand remain and Q2 margins were a miss. It sees the company’s high discount offering continuing. The research firm saw the rising compressed natural gas mix and average selling price as positive for the company. 

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The management expects festive season sales to rise 14% year on year, the brokerage notes. The research firm sees FY25 retail sales to grow at 3%-4% for the company. It also said the inventory for the company will come down to 30 days at the end of the festive season and discount pressure may ease in Q3.

HSBC had a "hold" call for Maruti. The brokerage said Q2 margins were weak due to a weak demand environment and high discounting and sees Q3 to be worse. The research firm expects the business to normalise in FY26 on the back of demand improvement and new product launches. The valuations of the company are also reasonable with hybrid tax cuts being the upside risk, the brokerage added.

UBS maintained a "buy" call while cutting the target price to ₹14,800. Q2 was a miss but the outlook on demand and margins are better, the research firm said. It added that things are not as bad as they seem and maintained a “buy” call on attractive valuations. With strong festive demand, inventories and discounts are under control, the brokerage said. 

Price Action: Shares of Maruti Suzuki were up 1.87% at ₹11,252.55  on Wednesday morning.

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