Maruti Shares Race To All-Time High After Blockbuster Earnings, Brokerages Raise Targets

Shares of Maruti Suzuki were rising on Thursday following the announcement of its quarterly results the previous day.

What Happened: The auto giant's standalone net profit for the quarter accelerated 47% to ₹3,649.9 crore, whereas revenue from operations saw a 10% increase to ₹35,531 crore.

The company beat analysts’ estimates for both metrics. Analysts had expected the auto giant's revenue to come in at ₹35,065 crore, while profit was seen at ₹3,373.50 crore.

Brokerage Views: Most brokerages seemed upbeat about the company’s health.

Morgan Stanley had an "overweight" call on the stock with the target price raised to ₹15,145. Despite navigating a challenging quarter, the company delivered impressive results, the brokerage noted. Analysts have upgraded their earnings estimates, reflecting more optimistic forecasts.

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Jefferies had a "buy" call for Maruti with an increased target price of ₹15,200. EBITDA in Q1 and recurring profit after tax (PAT) were 11%-12% above its estimates. Analysts at Jefferies were upbeat about the company's compressed natural gas (CNG) portfolio. Maruti continues to face a headwind of Industry demand shifting to sports utility vehicles (SUVs), it noted.

ICICI Securities notes that the company's profitability was driven by a higher-than-normal CNG mix and sees the firm growing 8% in FY2025 with EBITDAM of about 12.2%. ICICI maintained an "add" recommendation for Maruti with a target price of ₹13,995.

The firm's results surpassed HDFC Securities’ estimates. This was led by a decline in raw materials costs, benign commodity prices and favourable forex, the brokerage said. Given its aggressive series of launches over the past few quarters, Maruti remains the market leader in the utility vehicle segment, the brokerage added in its note. HDFC Securities maintained a "buy" rating on the stock with a target price of ₹13,767.

Phillip Capital also retained its "buy" call with a target price of ₹15,223. Emkay Global had a "reduce" recommendation with a target price of ₹12,000. The brokerage remained cautious over Maruti's passenger vehicles segment amid weakening underlying metrics such as moderating retails, higher inventory or discounts and a shrinking order book.

Price Action: Maruti Suzuki's shares were up 3.21% at ₹13,536.25 on Thursday morning.

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