Synopsis: A global brokerage sees strong upside in India’s largest carmaker after a quarter of robust volume growth and steady earnings, even as margin pressures weigh on near- term profitability.
Maruti Suzuki India reported a solid set of numbers for the January- March 2026 quarter, drawing a bullish response from Morgan Stanley. The brokerage maintained its ‘Overweight’ rating on the stock with a target price of Rs 17,895 – implying an upside of around 30% from current levels – and noted that the company is likely to outperform the broader auto industry in terms of growth.
Morgan Stanley on Maruti Suzuki Q4 FY26 Results
Strong Volume Growth Led by Exports
Maruti Suzuki’stotal sales volume for Q4 FY26 rose 11.8% year- on- year to 6,76,209 units, up from 6,04,635 units in Q4 FY25. Domestic volumes grew 3.7% to 5,38,994 units, while exports surged 61.3% to 1,37,215 units. For the full year FY26, total volumes rose 8.4% to over 24.2 lakh units, with domestic sales up 3.9% and exports jumping 34.6%. Morgan Stanley noted that exports were a key driver of FY26 outperformance, with Maruti commanding a 49% share of India’s total passenger vehicle exports. Looking ahead, the company has guided for around 10% domestic volume growth in FY27, ahead of Morgan Stanley’s own estimate of 8%, which the brokerage sees as a sign of industry outperformance.
Revenue Jumps, Margins Dip on Commodity Pressure
Net sales for Q4 FY26 came in at Rs 50,079 crore, a sharp 28.9% jump from Rs 38,839 crore in Q4 FY25. For the full year, net sales grew 20.2% to Rs 1,74,370 crore. Operating EBITDA for Q4 FY26 stood at Rs 6,157 crore, up 27.1% year- on- year, but EBITDA margin slipped marginally to 12.3% from 12.5% in Q4 FY25, with material costs rising to 76.7% of net sales from 74.3% a year ago. Morgan Stanley flagged that margins are likely to trough in Q1 FY27 before recovering, as operating leverage, lower discounts, and a richer product mix kick in.
PAT Dips on Lower Non- Operating Income
Despite strong operational numbers, profit after tax for Q4 FY26 declined 6.9% year- on- year to Rs 3,591 crore from Rs 3,857 crore in Q4 FY25. The key drag was a sharp fall in non- operating income, which came in at just 1% of net sales compared to 3.9% in the year- ago quarter. For the full year FY26, PAT grew 1% to Rs 14,445 crore, while PBT declined 2.8% to Rs 18,863 crore.
SUVs, First- Time Buyers Drive Demand Optimism
Utility vehicles remained a strong growth engine, rising 14.9% year- on- year to 2,19,721 units in Q4 FY26 and accounting for 40.8% of domestic volumes. The company also saw a steady rise in first- time buyers – from 42% in H1 FY26 to 48% in Q3 and 51% in Q4 FY26 – which Morgan Stanley highlighted as a positive demand indicator. Operational readiness remained strong with lean inventory levels, further supporting the brokerage’s constructive outlook on the stock.
About the Company
Maruti Suzuki India Limited is India’s largest passenger car manufacturer, holding a dominant share in the domestic auto market. The company offers a wide range of vehicles across segments, from entry-level hatchbacks to premium SUVs, supported by an extensive sales and service network. Backed by its parent Suzuki Motor Corporation, it focuses on innovation, fuel efficiency, and affordability. Maruti is also expanding into electric vehicles and strengthening its export presence to drive future growth.
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