Maruti Suzuki slips after Q4 margin miss; brokerages slash target prices

Shares of Maruti Suzuki slipped on April 28 after the auto major’s March quarter earnings fell short of expectations, leading multiple brokerages to lower their target prices. The company reported a 4.3 per cent year-on-year drop in net profit at Rs 3,711 crore, while revenue rose 6.4 per cent to Rs 40,674 crore.

However, the margin picture disappointed. Operating margins contracted sharply to 10.5 per cent from 12.3 per cent a year ago, mainly due to elevated costs from the new Kharkhoda plant, an unfavourable product mix, rising steel prices, and higher ad spend linked to the e-Vitara launch.

Management commentary further dented sentiment, with Maruti Suzuki warning of continued weakness in domestic demand and affordability challenges heading into FY26.

Here’s a snapshot of how key brokerages have adjusted their ratings and target prices:

International brokerages like JP Morgan and Goldman Sachs have flagged that margin headwinds could persist in the near term, requiring a strong new model cycle for any major re-rating. Others like Jefferies, while maintaining a 'buy' stance, prefer peers such as M&M, TVS Motor, and Eicher Motors in the auto sector.

Looking ahead, analysts expect exports to be a bright spot, with Maruti forecasting at least 20 per cent growth in overseas shipments for FY26. Domestic volumes, however, could stay under pressure. Broking house Motilal Oswal projects a 10 per cent earnings CAGR for Maruti over FY25–FY27, although margin compression by about 50 basis points is expected in FY26.

At 9:07 am, shares of Maruti Suzuki were trading lower by 0.41 per cent at Rs 11,428 on the NSE.