Maruti Suzuki shares deliver Rs 1.28 lakh crore shock from January peak. Is the worst behind?

Maruti Suzuki India Limited, the country’s largest carmaker, has seen a volatile start to 2026. After scaling a record high in the opening trading sessions of the year, the stock has reversed sharply and is now down nearly 25% from its peak, erasing roughly Rs 1.28 lakh crore in investor wealth.

The speed of the correction has been notable. In under three months, the stock has fallen from its peak of Rs 17,372 to around Rs 13,300 levels, making it one of the worst performers among four-wheeler companies so far this year. Mahindra & Mahindra has declined 19%, Hyundai Motor India is down 20%, while Tata Motors Passenger Vehicles has slipped over 6%.

What’s weighing on the stock?

According to Jefferies, while overall passenger vehicle demand in India remains healthy and Maruti’s export outlook is strong, concerns persist around its ability to significantly improve domestic market share and margins. Jefferies has also cut its FY27–FY28 EPS estimates by 9%.


Nomura, which maintains a Neutral stance, highlighted that while demand is currently steady, risks from potential fuel and vehicle price hikes, along with inflation, remain elevated. These factors are particularly relevant for price-sensitive small car buyers. The brokerage expects Maruti to face continued challenges in gaining market share as SUVs and EVs steadily increase their share over the medium term.

Amid rising commodity costs, Nomura has lowered its margin estimates by around 100 basis points, resulting in a 10% to 13% cut in EPS forecasts for FY27–FY28. These projections assume a roughly 150 basis point price hike in FY27.

The company’s domestic passenger vehicle wholesale market share has remained below 40% so far in FY26.

Is it time to buy?

Valuations at 20x FY28E EPS appear reasonable, and the company could benefit from the 8th Pay Commission, Wall Street major HSBC said.

Despite the recent decline in the stock, the company has started FY27 on a strong note. Maruti Suzuki reported its highest-ever monthly sales of nearly 2.4 lakh units in April, marking a rise of over 33% compared with 1.8 lakh units in the same month last year.

Domestic sales climbed to a record 1,91,122 units, up from 1,42,053 units a year ago, surpassing the previous peak of 1,82,165 units recorded in December 2025. “We are starting this year with a big bang. Small cars have contributed significantly to this growth,” Senior Executive Officer (Marketing & Sales) Partho Banerjee told PTI.

The company gave a positive domestic volume growth outlook of 10% for FY27 and indicated lean channel inventory of around 12 days. Demand trends remain healthy despite geopolitical uncertainties, while export prospects are balanced amid Middle East logistics challenges.

What are experts saying?

Morgan Stanley has assigned an Overweight rating with a target price of Rs 17,895, implying an upside of 39% from current levels, and has taken a tactical buy view for the near term. The brokerage expects outperformance over the next 30 days and believes margins are likely to bottom out in Q1FY27 before improving. Operating leverage, lower discounting and a richer product mix are expected to support margins. It also noted that valuations are below long-term averages and assigned a 70% to 80% probability to its bullish scenario.

HSBC has maintained its Buy rating on Maruti Suzuki with a target price of Rs 15,000. The brokerage said the company reported an in-line fourth quarter and has so far managed commodity inflation effectively. It added that management’s 10% volume growth guidance for FY27 was encouraging and reflects a resilient demand environment. HSBC also noted that valuations at 20x FY28E EPS appear reasonable, while Maruti Suzuki is expected to be a key beneficiary of the 8th Pay Commission.

Motilal Oswal has maintained its Buy rating on Maruti Suzuki while cutting its target price to Rs 15,529, implying an upside potential of 20%. The brokerage said the recent GST rate cut has helped revive demand for small cars, making vehicles more affordable for price-sensitive buyers.

The domestic brokerage has also retained its Buy rating while lowering its target price to Rs 15,529, indicating a potential upside of 20%. The brokerage noted that the recent GST rate cut has supported demand for small cars by improving affordability for price-sensitive buyers.

Maruti currently has an order backlog of 190,000 units. Along with a steady pipeline of new launches, this is expected to support 10% domestic volume growth in FY27E and aid a recovery in market share. Motilal Oswal believes this combination could drive a re-rating of the stock.

Maruti finds itself at a crossroads. While near-term pressures around market share, margins and a shifting demand mix continue to weigh on sentiment, the company’s strong volume momentum, healthy order backlog and steady pipeline of launches offer comfort. With valuations now below historical averages and brokerages largely constructive on the outlook, the focus will be on execution.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)