Maruti Suzuki (MSIL IN) – Q1FY27 Result Update – Accelerated Cost Realization Squeeze Margins – ACCUMULATE
Published on 01 Aug 2026
MSIL’s Q1FY27 operating revenue was in-line with estimates, while margins faced pressure primarily due to commodity inflation and accelerated cost absorption from change in settlement cycles to support its suppliers. MSIL reiterated FY27 volume guidance as it remains supply constrained, although ramp-up in recently added capacities will be key to monitor as retail demand remains healthy. Geopolitical risks, higher RM prices and currency movements are expected to keep near-term margins under pressure, further aggravated by EV ramp-up, partially offset by cost efficiencies, price increases and operating leverage. We estimate volume/realization CAGR of 9.6%/5.7% over FY26-28E, translating into revenue/EBITDA/APAT CAGR of 15.9%/14.4%/14.3%. We reiterate ‘Accumulate’ rating with TP of INR15,000 (previous INR15,600), valuing it at P/E of 25x FY28E EPS.
