Maruti Suzuki shares slip marginally after missing estimates in Q2; brokerages divided on stock outlook, check target prices

Shares of Maruti Suzuki, India's largest automaker, slipped marginally on Wednesday, October 28, following the release of its earnings for the second quarter of the financial year 2026-27. The company missed the Street's profit estimates by a significant margin due to higher input costs resulting from the West-Asia conflict even as the revenue rose sharply, driven by record quarterly vehicle sales volumes. Automakers in Asia's third-largest economy have been grappling with elevated prices of key raw materials such as steel and copper and a prolonged the Middle East conflict has worsened the situation, squeezing profitability and leading to price hikes.

Brokerages cautious on Maruti Suzuki Meanwhile, brokerages remain cautious about Maruti Suzuki India's growth trajectory going forward as high input costs are seen weighing on the company for the near to medium term, though strong festive demand and an increase in volumes is seen offsetting some of the adverse impact from high costs. Analysts trimmed their estimates for the company due to elevated commodity prices. The company's margins are also not likely to increase at a fast pace, according to brokerages. Maruti Suzuki share price today Maruti Suzuki shares were trading 0.60 higher at Rs 11,480.85, at around 1 pm on the BSE.

Earlier in the morning, the stock opened at Rs 11,460 and fell around 1.74 percent to touch an intra-day low of Rs 11,260. Maruti Suzuki Q2 results: Net profit falls 26.36% to Rs 2,466 cr; revenue rises on record sales Maruti Suzuki India Ltd on Tuesday reported a 26.36 percent decline in its consolidated net profit for the second quarter ended September at Rs 2,466.1 crore, due to higher input costs resulting from the West-Asia conflict even as the revenue rose sharply, driven by record quarterly vehicle sales volumes. The auto major had posted a net profit of Rs 3,349 crore in the same quarter of the previous fiscal.

During July-September, the company's total revenue from operations increased to Rs 53,355.5 crore as against Rs 42,344.2 crore in the same period of 2025-26 fiscal. Total expenses in July-September also shot up to Rs 50,619 crore as compared to Rs 39,018.4 crore in the year-ago period, the company said. Cost of materials consumed in the second quarter rose to Rs 37,488.5 crore from Rs 25,324.2 crore in the corresponding period last fiscal, it added. In a statement, Maruti Suzuki India said the Operating Profit (EBIT) in the quarter stood at Rs 2,803.7 crore as compared to Rs 3,382 crore in Q2 FY25-26 owing to the West Asia-conflict-linked commodity price increases.

Sequentially, it reported a growth of 10.8 percent from Q1 FY26-27. However, non-operating income declined sharply in Q2 due to mark-to-market losses on invested surplus. "The company achieved its highest-ever quarterly total sales volume of 696,654 units, registering a growth of 26.5 per cent over the same period previous year. The company's growth in the domestic passenger vehicle market was broad-based, with small car sales increasing by 35.9 per cent and SUV sales by 68.2 per cent. The company's recently introduced SUVs received a strong market response and contributed to this robust growth," it stated.

Maruti Suzuki India said its domestic market share increased by 2.2 percentage points to 40.8 per cent. "Recent capacity additions have enabled the company to serve the strong demand. Even with enhanced production capacity, demand continued to outpace supply resulting in a low network inventory of about 17 days and pending bookings of about 200,000 units at the end of the quarter. In export markets, despite the challenging geopolitical situation, the company could achieve sales of 1,08,119 units in Q2 FY 2026-27, as compared to 1,10,487 units in Q2 FY25-26," Maruti Suzuki said. Brokerages on Maruti Suzuki share price HSBC on Maruti Suzuki share: Buy, target price Rs 14,500 HSBC has maintained its 'Buy' rating on Maruti Suzuki with a target price of Rs 14,500.

The brokerage highlighted strong demand commentary with 10 percent domestic wholesale growth guidance in the second half of FY27. However, HSBC expects margin recovery to be gradual as price hikes are cautious, making margins dependent on commodities cooling off. It said the stock's valuation appears reasonable at current levels, with a decline in commodity costs emerging as a key potential trigger for the shares. CLSA on Maruti Suzuki share: Outperform, target price Rs 14,537 CLSA maintained its 'Outperform' outlook on Maruti Suzuki and set a target price of Rs 14,537. The brokerage said the company's Q2 EBITDA margin came in at 8.9 percent, up 71 basis points sequentially and ahead of consensus expectations, led by cost-reduction measures, price hikes and the gap between retail sales and wholesale dispatches.

CLSA noted that management expects domestic portfolio to grow 10 percent in H2FY27, with exports remaining broadly flat, implying overall volume growth of approximately 7-10 percent. The brokerage remains conservative in its estimates, building in 5 percent volume growth for H2FY27. With inventory below normal at just 17 days and a strong order book of 2.7 lakh units at the end of Dussehra, Maruti Suzuki remains confident it will deliver its 10 percent domestic volume growth guidance for 2H, highlighted the brokerage. CLSA also noted that Maruti Suzuki expects commodity costs to remain broadly flat QoQ in Q3FY27, which could support an improvement in trajectory of EBITDA margins.

Nomura on Maruti Suzuki share: Neutral, target price Rs 13,046 Nomura retained its 'Neutral' rating on Maruti Suzuki, with a target price of Rs 13,046. The brokerage viewed strong H2 guidance but sees risk of slowdown in FY28. The brokerage said the Q2FY27 numbers were broadly in-line with the estimates and EV salience is an important metric for stock's performance. It further highlighted that the 2QFY27 EBITDA was broadly in line and margin was at 8.9% vs Nomura's estimates of 8.8%. The company aims for a 10 percent on-year growth in its domestic sales for the second half of this fiscal year.

Overall, revenue growth in this period may be in the range of 7 percent and 10 percent, it said. This guidance is ahead of Nomura's expectations and the broking firm sees this positively. "With low inventory, channel filling will support wholesales even if retails slow down," the brokerage said. It upped its volume expectations by about 3 percent for FY27 to 2.83 million units. However, Nomura also flagged cost pressures, and it trimmed its expectations for the company's EBITDA margin to 9.7 percent for FY27, to 10.6 percent for FY28, and to 10.9 percent for FY29. Jefferies on Maruti Suzuki share: Buy, target price Rs 13,500 Global brokerage Jefferies lowered its target price on the stock by 18 percent to Rs 13,500 from Rs 16,500 while maintaining its 'Buy' call.

Jefferies expects Maruti Suzuki's margins to recover from the lows of the first half of 2026-27 (Apr-Mar) but high competition in the passenger car segment is likely to limit the extent of recovery. The brokerage expects the company's EBITDA margin to be between 9.4 percent and 11.3 percent over FY27-29. Jefferies trimmed its earnings per share estimates for FY27-29 by 7-11 percent. Motilal Oswal on Maruti Suzuki: Buy, target price Rs 14,800 Motilal Oswal Financial Services has a 'Buy' stance on the stock with a target price of Rs 14,800. "Sustained commodity inflation, an adverse export mix and limited scope for further price hikes are expected to weigh on near-term margins,"

Motilal Oswal Financial Services said. The brokerage cut its earnings estimates for FY27 by 7 percent. Gradual margin improvement is likely as raw material costs moderate and volumes scale up, said the brokerage adding that it expects the car maker to deliver 11 percent earnings over FY26-28 at a compounded annual growth rate. Emkay Global on Maruti Suzuki share: Add, target price Rs 13,300 Brokerage firm Emkay Global Financial Services maintained its 'Add' recommendation on the stock while cutting its price aim by around 14 percent to Rs 13,300. The brokerage cut its earnings per share estimates for FY27 by around 13 percent, and for FY28 and FY29 by 9 percent each amid commodity pressures.

It lowered its valuation multiple to 23 times from 25 times earlier as positives following the cuts in goods and services tax are now behind and macroeconomic risks increase. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.