Maruti Suzuki surges 15% in 7 days; ICICI Securities sees more upside

Maruti stock at new high: In the past one month, the stock has outperformed the market by soaring 20 per cent.

Maruti Suzuki India share price today

 

Shares of Maruti Suzuki India (MSIL) hit a new high of ₹14,795, gaining 2 per cent on the BSE in Tuesday’s intra-day trade in an otherwise weak market. Since August 18, in the past seven trading days, the stock has surged 15 per cent after the government proposed GST 2.0 reforms which aims to rationalize the current multi-slab structure into a simpler framework.

 

In the past one month, MSIL has outperformed the market by soaring 20 per cent. In comparison, the BSE Sensex and the BSE Auto index were up 0.2 per cent and 8 per cent, respectively.

 

 

MSIL is the market leader in the domestic passenger vehicle (PV) space with market share pegged at 40.9 per cent as of FY25 and popular models being WagonR, Swift, Brezza, Baleno, Ertiga, Fronx, among others.

 

What's driving MSIL stock price?

 

The government has proposed GST 2.0 reforms recently which aims to rationalize the current multi-slab structure into a simpler framework, with two main rates of 5 per cent and 18 per cent. 

 

Earlier, the government announced its biggest-ever overhaul in the personal income tax structure thereby increasing the tax exempt income from ₹7 lakh to ₹12 lakh in the Union Budget 2025-26. This tax relief is expected to increase disposable income in the hands of tax payers, thereby providing a big booster for the auto space amid anticipation that people will upgrade their standard of living by potentially buying new vehicles which can either be a 2-Wheeler or PV.

 

With rising per capita income, this represents healthy long term growth longevity for domestic PV space with MSIL could be a clear beneficiary. The major income tax slab overhaul announced for FY26 is also expected to boost purchasing power, favourably impacting entry and mid-sized vehicle demand, according to analysts at ICICI Securities.  Meanwhile, Prime Minister Narendra Modi on Tuesday flagged off 'e-VITARA', Suzuki's first global strategic Battery Electric Vehicle (BEV), at the Suzuki Motor plant in Hansalpur, Ahmedabad. CLICK HERE FOR FULL REPORT 

       

ICICI Securities see more upside in MSIL stock

 

With macro-economic triggers in term of rationalisation of income tax rate, GST rate and 8th pay commission roll-out, amidst optimism around upcoming festive demand, exports & new launches, analysts at ICICI Securities upgraded the stock to BUY with revised target price of ₹16,550; valuing it at 28x PE on FY27E.

 

MSIL’s deep rural penetration and wide product portfolio across entry, CNG, hybrid, and SUV segments, provides strong tailwinds. Additionally, upcoming Pay Commission revisions could further stimulate demand, benefiting MSIL. Entry level segment has been the real pain point and subject to muted volume growth in the recent past. Analysts believe this space will be the biggest beneficiary of GST rate cut with MSIL as the key gainer. 

 

Kotak Institutional Equities in its auto sector report said that price cuts in the entry-level segment can have higher elasticity, which could result in higher benefits for MSIL (more exposure to the entry-level segment).

 

Since the start of CY2025, the government has announced a slew of measures include income tax cuts, repo rate cuts along with CRR cuts and potential GST cuts in the coming months, which will stimulate demand in the coming months. Analysts said that they would like to highlight that the potential GST cut may dampen the festive demand (if GST rate-cut implementation gets delayed after festive) trends as consumers might wait for GST rate cuts to take advantage of the lower prices.  Overall, GST rationalization will support demand recovery going into FY2027E and will aid in earnings growth improvement for the sector, the brokerage firm said. However, the stock is trading above target price of ₹14,000 per share.