Maruti Suzuki India Ltd (MSIL) reported revenue and Ebitda down but in line in the September quarter amid higher discounts. Analysts said the automaker is in a cyclical situation and average selling price (AP) growth will be the key revenue driver for Maruti Suzuki in the wake of moderation in volumes.

A recovery in the small car segment could provide further impetus to growth, analysts said, saying Maruti Suzuki’s stock valuations were inexpensive and reasonable for a new entry. A handful of brokerages have target prices between Rs 12,000 and Rs 14,800 for the stock. The scrip closed at Rs 11,010 level on Tuesday.

MSIL, Nirmal Bang said, posted the highest ever ASP of Rs 6,87,000 per vehicle in the second quarter, largely on the back of improved product mix. Over the past two years, ASPs have increased by 19 percent. Nirmal Bang believes that the trend will continue thanks to the increasing share of SUVs, exports and limited edition vehicles in the entry segment.

Sales of small cars, where MSIL has 71 percent market share, have been badly hit over the past five years. Volumes in FY24 were 60 per cent lower than the peak in FY18. Any recovery in the segment will provide additional impetus to volume growth, Nirmal Bang said.

“At CMP, the stock is trading at 19x September 2026 EPS; we believe this is a very lucrative entry point and maintain MSIL our first BUY in the OEM segment,” he said while suggesting a target price of Rs 14,550.

Emkay Global upgraded MSIL stock from ‘Add’ to ‘Reduce’ with an unchanged target price of Rs 12,000, considering potential catalysts and cheap valuations at 25 times September 2026 base EPS.

“While we continue to believe that the near-term PV outlook is moderate, we note few potential catalysts for MSIL: a) declining volumes of key entry-level models, b) the launch of the 7-seater SUV ( H2FY26E), c) launch of electric vehicles (Q4FY25E), and d) possibility of recovery of small cars,” the brokerage firm said.

This brokerage reduced its FY25 EPS estimates by 8 percent and its FY26 and FY27 EPS estimates by 5 percent and 3 percent due to lower margins.

Nuvama said Maruti Suzuki’s growth during the festive period is likely to be 14 per cent, supported by strong UV sales and better rural demand. He noted that the retail growth forecast for FY25 is 3-4 percent.

“We forecast a revenue/Ebitda CAGR of 10%/11% over FY24-27E, driven by robust growth in SUVs and moderate growth in cars. The launch of the E-SUV (eVX model) and the gradual recovery in demand for hatchbacks are expected to catalyze volumes. We retain ‘BUY’ with a target price of Rs 13,800 (Rs 14,600 earlier) based on 27 times September 2026 base EPS plus cash of Rs 2,360 per share,” Nuvama said.

Nomura India has suggested a target price of Rs 12,455 for Maruti Suzuki. UBS has reportedly reduced the target price to Rs 14,800 from Rs 15,200. Investec has reduced its target price to Rs 12,385 from Rs 14,030.