Maruti Suzuki shares a Buy; market share revival key to drive re-rating, says MOFSL
Maruti Suzuki shares: MOFSL said the recent stock underperformance relative to the Nifty Auto Index was largely driven by weakness in wholesale volumes and a disappointing December quarter performance.
- Mar 12, 2026,
- Updated Mar 12, 2026 8:18 AM IST
Motilal Oswal Financial Services (MOFSL) in a fresh note said that a revival in market share would be a key trigger for a re-rating in shares of Maruti Suzuki India Ltd, adding that the recent stock underperformance relative to the Nifty Auto Index was largely driven by weakness in wholesale volumes and a disappointing December quarter performance.
Maruti Suzuki India shares have declined 12 per cent in the past six months and have underperformed the Nifty Auto index by almost 9 per cent. MOFSL said the prevailing concerns appeared overstated as it believes Maruti Suzuki to outperform the industry in FY27 and beyond once its near-term capacity constraints are resolved, supported by its robust product launch pipeline. Expecting nderperformance in
Wholesales is largely a function of the supply constraints that the company is currently facing, which will get addressed once its new capacity comes onstream from April onwards, MOFSL said.
"Further, to ascertain demand sustenance, we note here that retail demand continues to be healthy for MSIL, as is visible in Vahan retail. Further, as highlighted in our Q3 results update, the key reason for a relatively weak performance from MSIL was the fact that it had passed on the higher GST rate cut benefit to consumers on small cars and on Brezza to help sustain demand momentum," MOFSL said.
The domestic brokerage said Maruti Suzuki has a healthy launch pipeline that will help drive market share improvement going head. It noted that a new Brezza variant likely in a smaller engine, the recently launched e-Vitara, and at least one more new launch in FY27 will improve market share. This is apart from the recently launched Victoris, which is seeing healthy demand momentum, it added.
"We expect its export momentum to be sustained in the coming months, given the expected ramp-up of e-Vitara as well as Victoris going forward. Overall, we factor in MSIL to post 10 per cent volume CAGR over FY25-28E," MOFSL said.
Driven by strong demand across multiple markets, MSIL had already surpassed its FY26 export target of 4,00,000 units in February 2026 and continues to work towards its medium-term target of exporting 7,50,000-8,00,000 vehicles by FY31, MOFSL said. MOFSL expected export volumes to grow at a 25 per cent compound annual growth rate over FY25-28.
MOFSL estimated that MSIL would deliver a 16 per cent earnings compound annual growth rate over FY25-28. It reiterated a 'Buy; rating on the stock with a target price of Rs 17,406, valuing the company at 26 times its December 2027 estimated earnings per share. The price target suggests 29 per cent potential upside.
Motilal Oswal Financial Services (MOFSL) in a fresh note said that a revival in market share would be a key trigger for a re-rating in shares of Maruti Suzuki India Ltd, adding that the recent stock underperformance relative to the Nifty Auto Index was largely driven by weakness in wholesale volumes and a disappointing December quarter performance.
Maruti Suzuki India shares have declined 12 per cent in the past six months and have underperformed the Nifty Auto index by almost 9 per cent. MOFSL said the prevailing concerns appeared overstated as it believes Maruti Suzuki to outperform the industry in FY27 and beyond once its near-term capacity constraints are resolved, supported by its robust product launch pipeline. Expecting nderperformance in
Wholesales is largely a function of the supply constraints that the company is currently facing, which will get addressed once its new capacity comes onstream from April onwards, MOFSL said.
"Further, to ascertain demand sustenance, we note here that retail demand continues to be healthy for MSIL, as is visible in Vahan retail. Further, as highlighted in our Q3 results update, the key reason for a relatively weak performance from MSIL was the fact that it had passed on the higher GST rate cut benefit to consumers on small cars and on Brezza to help sustain demand momentum," MOFSL said.
The domestic brokerage said Maruti Suzuki has a healthy launch pipeline that will help drive market share improvement going head. It noted that a new Brezza variant likely in a smaller engine, the recently launched e-Vitara, and at least one more new launch in FY27 will improve market share. This is apart from the recently launched Victoris, which is seeing healthy demand momentum, it added.
"We expect its export momentum to be sustained in the coming months, given the expected ramp-up of e-Vitara as well as Victoris going forward. Overall, we factor in MSIL to post 10 per cent volume CAGR over FY25-28E," MOFSL said.
Driven by strong demand across multiple markets, MSIL had already surpassed its FY26 export target of 4,00,000 units in February 2026 and continues to work towards its medium-term target of exporting 7,50,000-8,00,000 vehicles by FY31, MOFSL said. MOFSL expected export volumes to grow at a 25 per cent compound annual growth rate over FY25-28.
MOFSL estimated that MSIL would deliver a 16 per cent earnings compound annual growth rate over FY25-28. It reiterated a 'Buy; rating on the stock with a target price of Rs 17,406, valuing the company at 26 times its December 2027 estimated earnings per share. The price target suggests 29 per cent potential upside.