On Wednesday, JPMorgan (NYSE:JPM) revised its price target for Maruti Suzuki India Ltd (MSIL:IN), lowering it to ₹12,160 from the previous ₹13,275. The firm has maintained a Neutral rating on the stock despite adjustments to its expectations.
This change comes after Maruti Suzuki's second-quarter financial performance for fiscal year 2025 revealed a sharp miss in earnings before interest, taxes, depreciation, and amortization (EBITDA) compared to JPMorgan's and consensus estimates.
Maruti Suzuki's revenue for the quarter was reported to be in line with or slightly below expectations, but the shortfall in EBITDA was significant, at 10% below JPMorgan's estimates and 7% below the consensus.
Despite this, the company's management has indicated a modest uptick in retail sales during the April to September period, which continued into October, resulting in a year-over-year cumulative retail increase of 3.9%.
The firm noted improvements in retail trends and acknowledged Maruti Suzuki's commentary on the potential for further upticks during the remainder of the festival season. However, it also pointed out that these improvements come with increased discounts and price cuts by Maruti Suzuki and its competitors.
JPMorgan does not anticipate a significant improvement in industry volume growth over the next two to three quarters and observes that Maruti Suzuki's market share has remained stagnant.
As a result of these factors, JPMorgan has reduced its earnings per share (EPS) forecasts for Maruti Suzuki for fiscal years 2025 to 2027 by 8-12%. This adjustment reflects expectations of moderated volumes and weaker margins. The firm's maintained Neutral rating comes with the revised price target, which has been rolled forward to December 2025.
JPMorgan has indicated that a material uptick in industry growth or an improvement in Maruti Suzuki's market share could lead to a more constructive view of the stock in the future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.