Business

IIE DIGITAL DESK ; June 30, 2026 | Mumbai : Shares of Maruti Suzuki India witnessed a sharp rally on Tuesday after global brokerage Jefferies upgraded the country's largest carmaker from 'Hold' to 'Buy' and significantly raised its target price to ₹16,500 from the earlier ₹13,800. The bullish recommendation triggered strong buying interest in the stock, pushing it up by nearly 5% during the trading session and making it one of the top gainers on the benchmark indices. 

Jefferies said its positive outlook is driven by several favourable factors that are expected to support Maruti Suzuki's earnings over the coming years. The brokerage believes that demand for passenger vehicles in India has remained resilient during the first half of calendar year 2026, easing earlier concerns about slowing automobile sales. Strong domestic demand, coupled with improving market conditions, has strengthened confidence in the company's future growth prospects.

Another key reason behind the upgrade is the sharp decline in global crude oil prices following the easing of geopolitical tensions in the Middle East. Lower fuel prices generally improve consumer sentiment and encourage automobile purchases, while also helping reduce logistics and manufacturing costs for vehicle makers. Jefferies believes this development removes a significant risk that had weighed on the automobile sector earlier this year.

The brokerage also highlighted that softer global metal prices are expected to reduce raw material costs, thereby improving Maruti Suzuki's profit margins. With lower input costs and healthy vehicle demand, Jefferies has increased its earnings per share (EPS) estimates for the company by around 2% to 4% for the FY2027–FY2029 period. It now expects Maruti Suzuki to deliver an earnings growth compound annual growth rate (CAGR) of nearly 16% over the same period.

According to Jefferies, the recent underperformance of Maruti Suzuki's stock has created an attractive investment opportunity. The brokerage pointed out that the shares have lagged the Nifty 50 index by around 16% so far this year, making current valuations relatively reasonable compared with the company's long-term growth potential. It believes the stock's valuation remains attractive despite the latest rally. 

The strong buying interest added nearly ₹20,500 crore to Maruti Suzuki's market capitalisation during the trading session, taking the company's valuation to approximately ₹4.42 lakh crore. Investors responded positively to the brokerage's optimism regarding improving demand, favourable commodity prices, and stable earnings growth.

Market analysts also noted that Maruti Suzuki has recently benefited from improving sentiment surrounding cleaner mobility initiatives, including its continued focus on alternative fuel technologies such as flex-fuel vehicles. Combined with easing crude oil prices and expectations of stronger consumer demand, these factors have contributed to renewed investor confidence in the automobile manufacturer. 

The rally in Maruti Suzuki also supported broader market sentiment, with the Sensex and Nifty trading higher during the session. Analysts will now closely monitor the company's upcoming sales performance, earnings growth, and management commentary to assess whether the positive momentum can be sustained over the coming quarters.