Extending its strong rally, shares of Maruti Suzuki India, the country’s largest automaker, hit another record high on Tuesday. The auto stock rose nearly 1% in intra-day trade today to a fresh peak of ₹15,384. With this, Maruti Suzuki stock has gained 41% so far in 2025, its biggest yearly advance since 2017.
Today’s uptick also pushed the company’s market capitalisation close to the ₹5 lakh crore mark, just 0.40% shy of the current ₹4.8 lakh crore.
Notably, it took Maruti nearly 16 months to add the latest ₹80,000 crore in market value after crossing the ₹4 lakh crore milestone in March 2024. According to BSE data, there are currently 12 companies with a market capitalisation above ₹5 lakh crore.
What triggered sharp rally in Maruti Suzuki shares?
Maruti Suzuki shares surged on Dalal Street after the government announced GST rate cuts on automobiles, fueling expectations of a revival in passenger vehicle demand, especially in the small car segment, which contributes nearly half of the company’s revenue.
Brokerages also see Maruti as the biggest beneficiary of the GST reduction and have revised their target prices higher, further fueling the rally and making the stock one of the top performers in the auto pack.
Sales of small cars, defined as petrol models with engine capacity below 1,200 cc and diesel below 1,500 cc, not exceeding 4 meters in length, had slowed in recent years as buyers shifted to larger, feature-rich SUVs. With GST rates on affordable cars reduced to 18% from 28%, expectations are rising that demand for budget-friendly models could rebound.
Maruti Suzuki’s sales volumes remained muted in August, slipping 0.6% year-on-year to 180,683 units on weak demand for small cars. Meanwhile, several automakers have already announced price cuts across variants to pass on the benefits of the GST reduction, with Maruti Suzuki also expected to revise its prices soon.
Chairman R.C. Bhargava, in an interview with the Financial Express, hinted at a significant reduction in car prices. He said the Alto could become cheaper by about ₹45,000, while the WagonR may see cuts of ₹60,000–70,000.
According to domestic brokerage JM Financial, small cars account for nearly 68% of Maruti Suzuki’s domestic volumes and stand to benefit most from the tax cut, which could reduce prices by 11–13%.
Larger cars and UVs, which contribute around 31% of sales, are expected to see a 5–10% reduction. The recently launched e-Vitara has yet to make a meaningful impact on volumes.
Analysts see Maruti stock hitting ₹17,000
Global brokerage Bank of America Securities (BofA), in its latest note, raised Maruti Suzuki’s share price target to ₹17,000 per share from ₹14,000, while maintaining a ‘buy’ rating on the stock.
ICICI Securities has also lifted its target price to ₹17,000 apiece with a ‘buy’ call, noting that the recent GST rate cut from 28% to 18% across most auto segments could inject fresh demand momentum.
“This is in addition to the rationalisation of personal income tax slabs, interest rate cuts, and the upcoming Pay Commission revisions. These factors are expected to increase affordability and stimulate demand, addressing the industry’s challenge of muted sales, particularly in the entry-level segment,” ICICI Securities said.
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