Maruti Suzuki shares get their highest price target from Goldman Sachs after an upgrade

Shares of Maruti Suzuki India Ltd. are in focus on Wednesday, September 24, as multiple analysts raised their price targets — projecting a further 17.5% upside potential for India's largest passenger car manufacturer, and even upgrading the stock. 

The stock has already risen 12% in the last one month.

Goldman Sachs has upgraded the stock to "buy" from "neutral" and has raised its price target by nearly 37% to ₹18,900 from ₹13,800 per share earlier. This revised price target is the highest on the street for Maruti Suzuki.

Meanwhile, Investec has maintained its "buy" rating on the stock and has raised its price target by 32.2% from ₹13,980 per share to ₹18,475 apiece, projecting an upside of nearly 14.9% from its previous close of ₹16,083 per share.

Goldman Sachs

The brokerage said it has upgraded the stock to factor in:

• Potential pickup in the market for entry-level cars post the GST cuts and price changes. The carmaker witnessed its strongest start to Navratri in over three decadesas it received around 80,000 enquiries and delivered nearly 30,000 cars on the first day. Ever since it announced additional price reduction last week, it has received 75,000 bookings with nearly 15,000 bookings per day, around 50% than usual, led by strong demand for small cars.


• Resumption of new model launches after a gap of two-and-a-half years with Victoris SUV and eVitara.


• Favourable exposure to 8th Pay Commission in the upcoming auto demand cycle.


• Relatively low carbon-dioxide risk compared to its peers estimated to be heading into the Corporate Average Fuel Efficiency (CAFE) 3 regime by the financial year 2028.In July this year, Maruti Suzuki had urged the Centre to review the CAFE norms saying the present framework penalises lightweight vehicles and favours larger, more polluting cars.

Goldman Sachs expects Maruti Suzuki's volumes to grow by 5%, 12% and 9% in FY26, FY27 and FY28 respectively, compared to the industry growth of 4%, 8% and 9%, in that order.

It has raised its earnings-per-share (EPS) estimate for financial year 2026-2028 by up to 12%.

Investec

Investec said Maruti Suzuki is well-placed to benefit from the anticipated demand upturn driven by GST rate rationalisation and monetary easing measures, given its higher indexation to the price-sensitive small car segment.

The brokerage sees Maruti Suzuki's recent launch of Victoris as a strengthening factor for the automaker in the fast-growing mid-size SUV space.

Also, the implementation of the 8th pay commission from 2026 should help the auto firm as well, as around 15% of its customer base is government employees, Investec said. The 8th Pay Commission can bring significant salary and pension increases for Central government employees and retirees.

The brokerage sees Maruti Suzuki's exports to remain robust, driven by healthy demand for SUVs such as Fronx, Jimny, and ramp-up of eVitara production and its expanding presence in various geographies.

Investec said Maruti Suzuki's valuation of 29x its FY27 price-to-earnings estimate in comparison to its five-year average of 28x is supportive.

Of the 48 analysts that have coverage on Maruti Suzuki, 41 have a "buy" rating, five have a "hold" rating and two have a "sell" rating.

Shares of Maruti Suzuki were trading 0.1% up at ₹16,119 apiece around 9.20 am. The stock has gained 11.5% in the past month, 35.3% in the last six months and 44% this year, so far.

Also Read: HSBC upgrades India eight months after downgrade, sets Sensex target at 94,000