Add Maruti Suzuki India Ltd For Target Rs.15,350 by Choice Institutional Equities Ltd
Q1FY27 Performance Highlights:
MSIL reported its highest-ever quarterly sales of 682,724 units, up 29.3% YoY, driven by robust domestic sales of 5,57,988 units (+29.5% YoY) and exports of 1,24,736 units (+28.6% YoY). Net sales increased 35.9% YoY to INR 524.5 Bn. However, profitability moderated with EBITDA declining 6.7% YoY to INR 43.1 Bn and PAT falling 10.8% YoY to INR 33.5 Bn, reflecting pressure from higher input cost.
Strong Demand across Domestic Portfolio:
Domestic volumes grew 29.5% YoY, with broad-based strength across segments. Demand remained robust following the GST reduction, with small car sales surging 34% YoY, while SUV sales grew 44.6% YoY, driving MSIL's domestic market share up 230 bps YoY to 41.2%. Healthy retail demand kept dealer inventory at just 13 days versus the optimal one month, while the pending order book stood at 1,30,000 units, reflecting continued supply-side constraint.
Exports Maintain Strong Growth:
Exports increased 28.6% YoY, despite geopolitical disruption. MSIL contributed over 55% of India's passenger vehicle exports in this quarter, with diversification across ~120 countries helping offset regional disruption. South Africa, Japan and Europe emerged as key export markets, reinforcing the company's leadership in India's PV exports.
Capacity Expansion Accelerates:
MSIL strengthened its manufacturing footprint by commissioning the second plant at Kharkhoda, Haryana (2,50,000 units), in May 2026 and the fourth manufacturing line at Hansalpur, Gujarat (2,50,000 units), in July 2026, adding 5,00,000 units of annual installed capacity. With these additions, the company's total annual production capacity has increased to 2.9 million units, with both facilities expected to ramp up over the next 4–6 months, supporting domestic and export growth.
View and Valuation:
We expect MSIL to a deliver steady growth, driven by GST benefits, new launches and strong exports, supporting volume and revenue visibility. We change our EPS estimate by (5.9)%/5.1% for FY27/FY28E. We have lowered our FY27E estimate factoring in, commodity inflation impacting margin. We arrive at our TP of INR 15,350 (earlier: INR 14,600), valuing the stock at 25x (maintained) FY28E EPS, while retaining our ‘ADD’ rating.
Q1FY27 Result: Revenue in line, EBITDA margin disappoints
* Revenue was up 35.9% YoY and flat QoQ to INR 5,24,557 Mn (vs CIE est. of INR 5,18,848 Mn) led by 29.3% YoY growth in volume and 5.5% YoY growth in ASP
* EBITDA was down 6.7% YoY and 30.0% QoQ to INR 43,111 Mn (vs CIE est. of INR 55,517 Mn). EBITDA margin was down 375 bps YoY and 352 bps QoQ to 8.2% (vs CIE est. of 10.7%) * PAT was down 10.8% YoY and 6.6% QoQ to INR 33,521 Mn (vs CIE est. of INR 37,975 Mn)
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SEBI Registration no.: INZ 000160131
