What stands out is the pace of this decline. In less than three months from its peak of Rs 17,372, the stock has slipped to around Rs 12,500 levels, making it the worst performer among four-wheeler companies so far this year. Mahindra & Mahindra follows with a 19% decline, while Hyundai Motor India is down 16%. Tata Motors Passenger Vehicles has also fallen over 15%.
What’s ailing the company?
According to Jefferies, while demand for passenger vehicles (PV) in India remains healthy and Maruti’s export outlook is strong, concerns persist around its ability to meaningfully improve domestic market share and margins. The brokerage has cut its EPS estimates by 3%-5% for FY26-FY28. It maintains a Hold rating and has lowered the target price to Rs 16,000 from Rs 17,500.Nomura shares a similar view. It notes that the company’s focus on boosting volumes in lower segments, supported by capacity expansion and its strong presence in entry-level categories, could weigh on margins amid rising costs. At the same time, the growing preference for SUVs may limit Maruti’s ability to expand overall market share. Nomura has a Neutral rating with a target price of Rs 16,118.
The company’s domestic PV wholesale market share has remained below 40% so far in FY26. A sustained decline in small car demand has been a key drag on performance in recent years. Additionally, Maruti faces capacity constraints that affect its ability to fully meet demand. While its flexible manufacturing setup allows it to shift production across models, this has led to volatility in dispatches in recent months.
Recent sales data reflect this pressure. Domestic PV wholesales in February were largely flat, rising just 0.1% year-on-year to 1,61,000 units. The mini segment, including Alto and S-Presso, remained unchanged at 10,238 units. The compact segment, comprising models such as Baleno, Celerio, Dzire, Ignis, Swift, and WagonR, declined 8.99% to 66,386 units, highlighting continued weakness in hatchbacks.
Is the correction overdone?
Motilal Oswal believes some of these concerns may be overstated. It has a Buy rating with a target price of Rs 17,406 and points to strong retail demand across both passenger cars and utility vehicles. The brokerage notes that while wholesale volumes have been constrained by capacity issues, this should ease from April 2026 as new capacity comes online.
It also expects Maruti to outpace industry growth in FY27, supported by a strong pipeline of launches, including a new Brezza variant, the recently introduced Victoris and e-Vitara, and at least one more model during the year.
Exports remain a bright spot. The company has already surpassed its FY26 export target of 4,00,000 units as of February 2026. It continues to aim for 7,50,000 to 8,00,000 units by FY31, implying a 25% volume CAGR in exports between FY25 and FY28.
Meanwhile, Axis Securities sees a structural tailwind from GST 2.0. Lower taxes are expected to reduce acquisition costs and boost demand for Maruti’s core portfolio, including hatchbacks such as Alto, Swift, WagonR and Baleno, along with compact SUVs like Brezza and Fronx. This could help the company regain some of the market share it has lost in recent years.
At the same time, the company is sharpening its play in the faster-growing utility vehicle space with new launches like the eVitara and Victoris. A balanced presence across segments, along with coverage of all key powertrains including ICE petrol, hybrid, CNG and EVs, will be critical for Maruti as it works towards regaining its long-term market share target of 50%.
Over FY25–FY28E, volumes are expected to grow at a CAGR of 7%, with a modest uptick in average selling prices driven by a richer product mix. This should translate into steady financial growth, with revenue, EBITDA, and PAT projected to grow at CAGRs of 12%, 11%, and 9%, respectively, over the same period, Axis added.
Maruti Suzuki’s sharp correction reflects a mix of near-term challenges around market share, margins, and capacity constraints, even as the broader demand environment remains supportive. While brokerages are divided, the medium-term story hinges on how quickly the company can scale up capacity, execute new launches and regain lost ground without compromising profitability.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)