Morgan Stanley positive on Maruti Suzuki on first-time buyer revival; see what Rs 18,360 target implies

Maruti Suzuki India shares inched up on Friday, continuing to rise for the fourth trading session in a row, tracking strong investor interest following the company’s announcement of the new SUV, Victoris, this week. The stock rose as much as 1.2 per cent to Rs 16,016 apiece on BSE, set to close the week almost five per cent higher.

In mid-morning deals, the stock was up 0.2 per cent at Rs 15,842 apiece on the bourse.

Morgan Stanley has retained its overweight rating on Maruti Suzuki, with a target price of Rs 18,360 per share.

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The foreign brokerage's target signals a 16 per cent upside from the auto stock's previous close.

How Morgan Stanley views Maruti Suzuki India

Morgan Stanley highlighted the revival of first-time buyers in emerging markets as a key growth driver for Maruti Suzuki. The brokerage expects the normalisation of the auto major's entry-level model discounts and stable sales volumes to positively impact its earnings.

First-time buyers remain a crucial growth segment for Maruti Suzuki India, according to the brokerage.

Maruti Suzuki’s focus on this segment could significantly boost revenues, the brokerage noted in a research report.

It also cited new product launches and expansion in exports as additional catalysts for medium-to-long-term growth.

Maruti Suzuki's focus on entry-level models

The GST (Goods and Services Tax) Council cut taxes on small cars, bikes up to 350cc, and three-wheelers to 18 per cent, down from 28 per cent. This led to a reduction in car prices, with the actual reduction being around 8.5 per cent.

According to Zee Business research, apart from the GST 2.0 rate cut, Maruti Suzuki has offered additional discounts ranging from 9 per cent to 24 per cent, effective from September 22. This is a 'limited-time offer' with the focus currently on entry-level models. Some of the entry-level models to witness price reductions due to GST 2.0 and extra discounts include:

1) The S-Presso sees an 18 per cent price drop with a new starting price of around Rs 3.50 lakh.

2) The Alto K10 gets a price cut of up to Rs 1.08 lakh (12.5 per cent), with a new starting price of around Rs 3.70 lakh.

3) The Celerio has a price reduction of up to Rs 94,100 (17 per cent cut) with a new starting price of around Rs 4.70 lakh.

4) The Wagon-R sees a cut of up to Rs 79,600 (13 per cent cut) to a new starting price of Rs 4.99 lakh.

Other models like the Ignis (up to Rs 71,300 cut), Baleno (up to Rs 86,100 cut), Brezza (up to Rs 1,12,700 cut), and Grand Vitara (up to Rs 1,07,000 cut) also have new starting prices of upto Rs 5.35 lakh, Rs 5.99 lakh, Rs 8.26 lakh, and Rs 10.76 lakh, respectively.

Q1 FY26 Performance Highlights

For Q1 FY26 (April–June 2025), Maruti Suzuki reported a net profit of Rs 3,792.40 crore, up 0.87 per cent year-on-year, and revenue of Rs 38,605.20 crore, a 7.9 per cent increase. EBITDA margins declined to 10.4 per cent from 12.6 per cent, domestic sales fell 4.5 per cent, while exports surged 37.4 per cent, reflecting strong overseas demand.