Maruti Suzuki shares see target price cuts by Jefferies, Nomura, other brokerages after Q2 net profit drops 26% YoY. What’s ahead?

ETMarkets.com

Maruti Suzuki’s sharp 26% drop in bottom line and 17% fall in operating profit (EBIT) to Rs 2,804 crore during the second quarter was attributed to West Asia conflict-linked commodity increases. “Non-operating income declined sharply in Q2 owing to mark-to-market losses on invested surplus,” the company said, explaining the rationale behind the sharp drop in profit.

Its revenue from operations, however, grew around 26% YoY to Rs 53,356 crore during the quarter under review, compared to Rs 42,344 crore reported in the corresponding quarter of the previous financial year. The company achieved its highest-ever quarterly total sales volume of 6.97 lakh units, registering a growth of 26.5% YoY. Its growth in the domestic passenger vehicle market was broad-based, with small car sales increasing by nearly 40% and SUV sales by more than 68%.

Also read | Maruti Suzuki Q2 Results: Profit falls 26% YoY to Rs 2,466 crore, but revenue rises 26%

Jefferies on Maruti Suzuki share price

Jefferies maintained its ‘Buy’ rating on Maruti Suzuki shares but slashed its target price to Rs 13,500 from Rs 16,500. The latest target price implies nearly 18% upside potential from the stock’s previous closing price of Rs 11,450 apiece.

The international brokerage cut Maruti Suzuki’s FY27-29 EPS estimates by 7-11%, mainly factoring in lower margins and lower financial income. While it retained its ‘Buy’ call on the stock, it kept it lower in pecking order after TVS Motor Company, Eicher Motors and Mahindra & Mahindra.

The shares of the company are down 31% this year so far, underperforming Nifty50 by 18%, and are trading at a reasonable 20x FY28 PE, Jefferies noted.

Nomura on Maruti Suzuki share price

Nomura maintained its ‘Neutral’ rating on Maruti Suzuki shares but reduced its target price to Rs 13,046 from Rs 14,071. The latest target price implies around 14% upside potential.

The international brokerage highlighted the company’s strong guidance for the second half of FY27. The management expects 10% domestic growth and flat exports, leading to 7-10% total growth in the second half of FY27. Festive sales are up 30% YoY since Onam. The company has not seen any weakening in rural demand. The pending order book rose to 2.7 lakh units. The New Brezza has received a strong response, and first-time buyers were 51%.

Nomura noted that the strong growth guidance for the second half of FY27 was ahead of its expectations and is positive. With low inventory, channel filling will support wholesale even if retail slows down, it said. However, it remains watchful of demand risks in FY28, particularly for hatchbacks, considering the risks from higher interest rates, inflation, weak monsoons and oil prices.

Among the four-wheeler makers, Nomura, however, prefers Mahindra & Mahindra and Hyundai Motor India.

Also read | Bhargava says don’t write ‘obituary of small cars’ as Maruti sells nearly 4 lakh units in H1

Elara Capital on Maruti Suzuki share price

Elara Capital maintained its ‘Buy’ rating on Maruti Suzuki shares but reduced its target price to Rs 15,378 from Rs 17,298. The latest target price implies 34% upside potential.

The brokerage cut EBITDA estimates for FY27-29 by 4-9%, and EPS estimates by 7-15%.

Maruti Suzuki share price

Maruti Suzuki shares have gained over 2% in a week but dropped around 5% in a month and more than 31% in 2026 so far. The stock has overall fallen about 30% in the past year.

In the longer term, Maruti Suzuki shares delivered positive returns of a little over 8% in three years and 55% in five years. The company has a market capitalisation of more than Rs 1.45 lakh crore.