MARUTI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.3

• 📈 Revenue Growth: Quarterly PAT declined from ₹3,712 Cr to ₹3,293 Cr, but YoY profit variation is +7.3%
• 💰 Profit Margins: Strong, ROE at 15.6% and ROCE at 21.7%
• ⚖️ Debt Ratio: Debt-to-equity at 0.00, debt-free balance sheet
• 💵 Cash Flows: EPS of ₹453, robust earnings power
• 📊 ROE/ROCE: Efficient capital use, above industry averages
• 📉 Valuation: P/E 36.2 vs Industry PE 33.9, slightly overvalued
• 📚 Book Value: ₹3,098, P/B ~5.3
• 📈 PEG Ratio: 0.50, attractive growth at reasonable valuation
• 🚗 Business Model: Leading passenger vehicle manufacturer with strong presence in compact and mid-size segments
• 🛡️ Competitive Advantage: Market leadership, wide distribution, strong brand equity, and cost-efficient manufacturing

Positive

• ✅ Debt-free balance sheet
• ✅ Strong EPS of ₹453
• ✅ PEG ratio at 0.50 indicates undervaluation relative to growth
• ✅ FII holdings increased (+0.58%)

Limitation

• ⚠️ Quarterly PAT declined from ₹3,712 Cr to ₹3,293 Cr
• ⚠️ P/E ratio (36.2) slightly above industry average (33.9)
• ⚠️ DII holdings reduced (-0.70%)
• ⚠️ Dividend yield at 0.83%, modest shareholder returns

Company Negative News

• 📉 Short-term profit decline in latest quarter
• 📉 Margins under pressure from rising input costs

Company Positive News

• 🌍 Strong SUV and compact car sales
• 🚗 Expansion in hybrid and EV portfolio
• 💡 Consistent long-term growth with strong market share

Industry

• 💹 Industry PE at 33.9, Maruti trades at a slight premium
• 📈 Auto industry supported by rising demand, infrastructure push, and EV adoption

Conclusion

Maruti demonstrates strong fundamentals with robust profitability, debt-free operations, and leadership in the passenger vehicle segment. Valuation is slightly above peers but PEG ratio suggests attractive growth potential. Entry zone is favorable around ₹15,500–16,000 (near DMA 50 support). Long-term holding is recommended given strong brand equity, expanding EV portfolio, and consistent demand growth.

Would you like me to extend this into a peer benchmarking overlay comparing Maruti with Tata Motors and Hyundai India, or should we run a sector rotation scan to identify compounding opportunities across auto and EV plays?