🧠 At a Glance
India’s biggest carmaker just wrapped up a stellar FY25 with ₹14,500 Cr in profit, almost 4x jump from FY21 lows. Despite EV buzz and Tata’s PR overdrive, Maruti holds 45% market share in the passenger vehicle segment and remains Suzuki’s crown jewel globally. But can this ICE legend keep firing?
📈 1. Financial Track Record: 5-Year Growth Engine
| Metric | FY21 | FY25 | % Change |
|---|---|---|---|
| Sales Revenue | ₹70,372 Cr | ₹1,52,913 Cr | 🔼 117% |
| Net Profit | ₹4,389 Cr | ₹14,500 Cr | 🔼 230% |
| EBITDA Margin | 8% | 13% | 🔼 500 bps |
| ROCE | 11% | 22% | 🔼 Doubled |
| EPS | ₹145.3 | ₹461.2 | 🔼 217% |
| Dividend Payout | 31% | 29% | ➖ Stable |
👉 CAGR (5-Year):
- Revenue: 15%
- Profit: 35%
- Stock Price: 17%
💪 2. What’s Driving the Surge?
- 🚘 Volume Growth: Steady demand recovery post-COVID with consistent launches across SUV + CNG categories.
- 💸 Operating Leverage: Fixed cost absorption + raw material price stability = higher margins.
- 🌱 Debt-Free: Almost no borrowings since FY22.
- 💰 Strong Free Cash Flow: ~₹16,000 Cr from operations in FY25, reinvested into expansion and R&D.
⚔️ 3. Competition Check: Tata & Mahindra Enter the Arena
| Company | P/E | ROE % | OPM % | FY25 PAT (₹ Cr) |
|---|---|---|---|---|
| Maruti | 27.7 | 16.0 | 13.2 | 14,500 |
| Tata Motors | 8.8 | 28.1 | 12.6 | 28,226 (JLR heavy) |
| Mahindra | 30.9 | 18.1 | 19.2 | 12,929 |
🧠 Maruti’s challenge: EV lag.
🧠 Maruti’s moat: Brand + dealer network + rural dominance.
💰 4. Fair Value (FV) Range — Time to Book or Vroom Ahead?
📊 Valuation Math
- EPS FY25: ₹461
- Historic PE Band (10Y): 20x–30x
- Premium justified due to margin rebound + debt-free
🧮 FV Range = ₹461 × PE (22–26) = ₹10,142 to ₹11,986
💡 CMP: ₹12,767 = Slightly overvalued on trailing basis, but pricing in strong FY26 as well.
⚠️ 5. Red Flags / Risks
- 🔌 EV Disruption: No serious presence yet in BEVs. Tata and M&M running ahead.
- 🌍 Export Weakness: Global slowdown could hurt exports.
- 🔻 Falling FII Holding: Dropped from 22% to 14.9% in 2 years.
- 🚫 Low Dividend Yield: At just 0.98%, don’t expect income from this.
🛠️ 6. What’s Cooking for FY26?
- 🏭 New Manufacturing Units: In Gujarat and Haryana.
- ⚡ EV Plans: First EV model planned for 2025–26 (finally).
- 📉 Inventory Days Up: From 19 to 23 — mild warning on supply chain normalization or demand slowdown?
- 🛣️ Launches Coming: Premium SUV segment, more CNG variants.
🧃 7. EduInvesting Take
Maruti isn’t sexy. It doesn’t scream “EV” or “AI-powered carOS.”
But it quietly prints cash, controls 45% of Indian roads, and is gearing up for its next innings with cleaner fuel and tech upgrades.
Would we buy at ₹12,767?
Only if you believe the FY26 earnings will cross ₹500 EPS — not impossible, but priced in.
🟢 If it dips to ₹11,000, it’s a margin-of-safety zone.
🔴 If it crosses ₹13,800, the air gets too thin.
✍️ Written by Prashant | 📅 26 June 2025
Tags: Maruti Suzuki, auto stocks, passenger vehicles, EV competition, Suzuki, Tata vs Maruti, car stocks India, fair value analysis
