HSBC recommends 'Buy' on Maruti Suzuki citing growth in EV segment, projects nearly 10% upside

Broking firm HSBC has initiated coverage on Maruti Suzuki with a "Buy" rating citing strong growth prospects, particularly in the electric vehicle (EV) segment.

The brokerage house has set a target price of ₹14,000, a potential upside of 9.5% from Tuesday's closing level. HSBC's outlook on the stock is buoyed by the favourable pricing and specifications of Maruti's e-Vitara, which competes effectively against both European and Chinese models.

According to HSBC, the e-Vitara’s price proposition is compelling, especially in comparison to its competitors in the EV market. The model offers competitive specifications at a price point that positions it attractively in the Indian market. This could be a key factor driving its success as consumers look for value-for-money electric options.

HSBC further pointed out that the import duties on Chinese completely built units (CBUs) and other auto parts are likely to benefit Maruti Suzuki's pricing structure. The higher import duties make Chinese-made EVs and parts more expensive, providing a relative cost advantage to Suzuki's locally manufactured EVs, including the e-Vitara.

Additionally, the brokerage highlighted that the e-Vitara's total cost of ownership (TCO) is lower than many of its competitors. This gives the model an edge in attracting customers, particularly in price-sensitive markets where long-term savings are a significant consideration.

HSBC’s positive outlook on Maruti Suzuki is also underpinned by the company’s strong position in the Indian automotive market and plans to expand its EV footprint. As the electric vehicle market in India continues to grow, Maruti Suzuki’s push into the segment, with competitive pricing and cost advantages, is expected to help the company gain traction in key markets.

Earlier, the brokerage house stated that India would be the export hub for electric vehicles for Suzuki and even Toyota. Moreover, Maruti Suzuki offers the potential for a strong volume upside.

HSBC analysed the top export markets of Suzuki and EV penetration. It also sees its 5,000 to 6,000 units per month sales estimate as plausible.

Shares of Maruti Suzuki India Ltd. were seen trading nearly flat, down by 0.44% at ₹12,730.25 apiece on the BSE at around 10 am.

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