Maruti Suzuki Swift, WagonR, Baleno, Brezza to gain from GST cut; stock target upped 15%
Maruti Suzuki share price: The GST tax relief should catalyse a demand rebound aided by festive season and replacement-led purchases, Centrum said.
- Sep 5, 2025,
- Updated Sep 5, 2025 10:39 AM IST
Maruti Suzuki India Ltd (MSIL) stands out as the prime beneficiary of GST cut on small cars with over 60 per cent of its portfolio including Swift, WagonR, Baleno, Fronx and Brezza qualifying for the 18 per cent slab, said Centrum Broking as the brokerage upped its target price for the auto stock by 15 per cent. Coming at a time when its small-car segment has been under strain from weak sentiment and a tilt toward larger vehicles, the tax relief should catalyse a demand rebound aided by festive season and replacement-led purchases, Centrum said.
The domestic brokerage built in 1–10 per cent earnings upgrades for FY26E–28E and reiterated its 'Buy' on Maruti Suzuki with a revised target of Rs 16,907 against Rs 14,719 earlier. It values Maruti at 26 times against 25 times H1FY28E EPS earlier.
To recall, the government’s GST 2.0 rationalisation has brought steep cuts across key auto categories, with small cars (of less than 1,200cc petrol/CNG/LPG or less than 1,500cc diesel, under 4 meter -- now taxed at 18 per cent against 28–31 per cent earlier. SUVs and large cars would be taxed at 40 per cent against 45–50 per cent while GST on EVs are retained at 5 per cent, removing the overhang of a potential hike.
"This materially improves affordability in entry and mid-compact categories," Centrum said.
Looking ahead, the brokerage sees multiple growth levers improving MSIL momentum. They include portfolio realignment toward SUVs, along with the recent launch of new Victoris, improving pricing power and mix. Centrum sees a cyclical recovery in mini-compacts amplified by the GST cut, entry into the EV segment from FY26E, opening a new growth avenue, and resilient export growth of 20 per cent in FY26E.
"Additionally, company’s sharper focus on CNG and hybrid powertrains aligns with the industry’s pivot toward efficiency and sustainability, cushioning near-term pressure in the hatchback segment. We believe the GST reforms provide a strong demand kicker, while structural drivers underpin a durable earnings upcycle. We build in 1–10 per cent earnings upgrades for FY26E–28E and reiterate BUY with a revised target of Rs 16,907," Centrum said.
Maruti Suzuki India Ltd (MSIL) stands out as the prime beneficiary of GST cut on small cars with over 60 per cent of its portfolio including Swift, WagonR, Baleno, Fronx and Brezza qualifying for the 18 per cent slab, said Centrum Broking as the brokerage upped its target price for the auto stock by 15 per cent. Coming at a time when its small-car segment has been under strain from weak sentiment and a tilt toward larger vehicles, the tax relief should catalyse a demand rebound aided by festive season and replacement-led purchases, Centrum said.
The domestic brokerage built in 1–10 per cent earnings upgrades for FY26E–28E and reiterated its 'Buy' on Maruti Suzuki with a revised target of Rs 16,907 against Rs 14,719 earlier. It values Maruti at 26 times against 25 times H1FY28E EPS earlier.
To recall, the government’s GST 2.0 rationalisation has brought steep cuts across key auto categories, with small cars (of less than 1,200cc petrol/CNG/LPG or less than 1,500cc diesel, under 4 meter -- now taxed at 18 per cent against 28–31 per cent earlier. SUVs and large cars would be taxed at 40 per cent against 45–50 per cent while GST on EVs are retained at 5 per cent, removing the overhang of a potential hike.
"This materially improves affordability in entry and mid-compact categories," Centrum said.
Looking ahead, the brokerage sees multiple growth levers improving MSIL momentum. They include portfolio realignment toward SUVs, along with the recent launch of new Victoris, improving pricing power and mix. Centrum sees a cyclical recovery in mini-compacts amplified by the GST cut, entry into the EV segment from FY26E, opening a new growth avenue, and resilient export growth of 20 per cent in FY26E.
"Additionally, company’s sharper focus on CNG and hybrid powertrains aligns with the industry’s pivot toward efficiency and sustainability, cushioning near-term pressure in the hatchback segment. We believe the GST reforms provide a strong demand kicker, while structural drivers underpin a durable earnings upcycle. We build in 1–10 per cent earnings upgrades for FY26E–28E and reiterate BUY with a revised target of Rs 16,907," Centrum said.