Motilal Oswal says Maruti Suzuki underperformance concerns 'overdone'; Stock may rise 29%

Brokerage firm Motilal Oswal believes that concerns regarding the underperformance of Maruti Suzuki India Ltd.'s shares is "overdone" and reiterated its bullish view on India's largest manufacturer of passenger cars.

Motilal Oswal maintained its "buy" rating on the stock with a price target of ₹17,406, which implies an upside potential of 29% from Wednesday's close.

Possible revival of market share

Motilal Oswal said Maruti Suzuki's recent underperformance relative to the auto index is likely driven by subdued wholesales and a disappointing December quarter result. For the month of February, shares of Maruti Suzuki rose 1.7%, compared to a 5.2% rise on the Nifty Auto index.

However, it believes these concerns seem to be overdone, given that the retail demand for Maruti Suzuki remains health, both in cars and SUVs. The demand for cars has picked up post the GST rate cut in September last year and Maruti Suzuki is emerging as a key beneficiary of the same, as per the brokerage note.

Wholesales for Maruti are capped in the near-term by capacity constraints, which are likely to be addressed from April 2026 onwards as new capacity comes on stream, as per Motilal Oswal.

Once the new capacity is on stream, Motilal Oswal expects Maruti Suzuki to outperform industry growth backed by its launch pipeline, including benefits from the recently launched Victoris and e-Vitara, the soon-to-be launched Brezza upgrade and at last another launch is expected in the financial year 2027.

The healthy launch pipeline and revival in cars could help revive the automaker's market share, it said.

Overall, Motilal Oswal has factored in Maruti Suzuki's earnings to grow at a compound annual growth rate (CAGR) of 16% over FY25-28.

Exports a key growth driver

Suzuki Japan is shifting more of its export market production to India. It has also made India its global production hub for the e-Vitara and the Victoris.

Also, the Toyota and Suzuki alliance offers long-term growth opportunities as the former's global markets are now accessible to Maruti, the brokerage said.

Maruti Suzuki has already surpassed its export target for financial year 2026 of 4 lakh units in February 2026, led by a strong demand momentum across multiple markets, Motilal Oswal said. The automaker continues to work towards its medium-term target to export 7.5 lakh to 8 lakh vehicles by financial year 2031, it added.

Given these tailwinds, Motilal Oswal expects the automaker to post 25% exports volume CAGR over FY25-28.

Stock performance

A total of 48 analysts have coverage on Maruti Suzuki. Of them, 41 have 'buy' ratings, five have 'hold' ratings and two have 'sell' ratings on the stocks.

Maruti Suzuki shares ended the previous session 2.7% lower at ₹13,500 apiece. The stock has declined 11.9% in the past month and 19.2% this year, so far.

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