Maruti Suzuki shares slip 2% post Q1 results: Should you buy, sell or hold?

Mint

a day ago

Shares of Maruti Suzuki slipped nearly 2 percent on Tuesday, following the release of its financial results for the June quarter (Q1FY26). The stock touched an intraday low of ₹ 12,416.60, leaving it around 9 percent below its 52-week high of ₹ 13,675, hit in August 2024. In contrast, the stock had bottomed out at a 52-week low of ₹ 10,725 in December 2024. Over the past year, the stock has declined 4 percent, though it has gained 15 percent year-to-date in 2024.
Maruti Suzuki posted a 2 percent year-on-year increase in net profit, reporting ₹ 3,712 crore for the quarter ended June 30, 2025, compared to ₹ 3,650 crore in the same period last year. Revenue rose 8 percent to ₹ 38,414 crore from ₹ 35,531 crore in Q1FY25.
In a regulatory filing, the company highlighted continued weak demand in the domestic passenger vehicle segment during the quarter. Domestic sales declined by 4.5 percent; however, a strong 37.4 percent surge in exports helped offset the weakness, resulting in a 1.1 percent overall increase in total sales volume. Maruti sold a total of 527,861 vehicles during the quarter, including 430,889 units sold in India and 96,972 units exported.
On the operational front, EBITDA fell 11.2 percent year-on-year to ₹ 3,997 crore, and EBITDA margin contracted to 10.4 percent from 12.7 percent in the year-ago period.
Elara Capital maintained an 'Accumulate' rating on Maruti Suzuki, while raising its target price to ₹ 14,279, implying an upside potential of 15%. The brokerage highlighted that the key trigger for the stock lies in a revival in domestic demand, especially during the festive season. It projected FY26 domestic volume growth at around 1 percent, in line with industry expectations. Strong rural demand contrasts with weak urban demand and affordability pressures in the entry-level segment. The brokerage revised its FY26-27 estimates down by 2–3 percent but rolled forward valuations to September 2027 with a 25x PE multiple.
JM Financial retained a 'Buy' rating and assigned a price target of ₹ 14,250, implying a 15% upside potential. According to the brokerage, the EBITDA margin of 10.4 percent in Q1FY26 was slightly better than estimates. Realisation improved to ₹ 693,832, aided by higher CNG vehicle contribution in the SUV segment. However, this was offset by higher raw material costs, sales promotions, and new plant-related expenses. The firm expects export volumes to remain robust, supported by models like the e-Vitara, Jimny, and Fronx. JM Financial anticipates a drop in ramp-up costs at the new plant starting from Q3FY26 and expects a better product mix to support future margins. Consequently, it revised EBITDA margin forecasts to 11.4 percent (FY26E) and 12.0 percent (FY27E), along with modest changes in EPS estimates.
HDFC Securities maintained its 'Buy' rating with a target price of ₹ 14,990, indication an upside potential of 21%. The brokerage noted that Q1 margins were in line with expectations and should improve as capacity utilization at the Kharkhoda plant ramps up. However, near-term challenges such as elevated steel prices and muted domestic demand may continue to weigh on performance through FY26. HDFC Sec is more optimistic about FY27, citing potential tailwinds from the 8th Pay Commission, tax cuts from the previous Union Budget, and pent-up replacement demand. On the export front, HDFC sees medium-term strength, attributing it to Maruti's efforts in diversifying its export portfolio.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.