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On Monday, Maruti Suzuki India (NSE:MRTI) Ltd (MSIL:IN) received an upgraded stock rating from Jefferies, moving from Hold to Buy, with an increased price target set at INR 15,000, up from the previous INR 11,300. The revision comes amid expectations that the company will benefit from an improving demand outlook in the passenger vehicle (PV) industry.
Analysts at Jefferies have revised their forecasts for Maruti Suzuki, expecting a 3% increase in the company’s FY26-27E volumes and an approximate 0.5 percentage point boost in EBITDA margin. This adjustment is anticipated to result in a 6-7% enhancement in earnings per share (EPS). The new price target is based on a 25x September-26E price-to-earnings (PE) ratio.
Despite the upgrade, Jefferies maintains some reservations about Maruti Suzuki’s market position. The firm’s market share has been declining, reaching a 12-year low at 41% in the first nine months of FY25. Due to this concern, Maruti Suzuki is positioned lower in Jefferies’ pecking order of stock preferences.
In contrast to the positive outlook for Maruti Suzuki, Jefferies has reduced its EPS forecasts for Ashok Leyland (NSE:ASOK) (AL) for FY25-27E by 5-10%. For Tata Motors Ltd (NSE:TAMO) (TTMT), while the estimates for its India operations have been lowered, the EPS forecast for FY25-27E remains broadly unchanged. This stability is attributed to the significant contribution of Jaguar Land Rover (JLR), which accounts for 75% of Tata Motors (NYSE:TTM)’ EBITDA, buffering the overall financial expectations for the company.
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