Maruti Suzuki Brezza upgrade targets higher SUV volumes and market-share recovery

Investment View and Key Drivers

Motilal Oswal Financial Services reiterates its BUY view on Maruti Suzuki, supported by an upgraded Brezza, a healthy model-launch pipeline, a recovery in small-car demand, export growth and expected margin normalisation. The broker expects a sustained recovery in market share to support a re-rating and forecasts a 20 per cent earnings CAGR over FY26-FY28.

The target price is Rs 17,059, based on 26 times FY28E earnings per share, compared with the current market price of Rs 13,948.

Upgraded Brezza to Support SUV Volumes

MSIL launched the updated Brezza in India on July 24, 2026, at ex-showroom prices of Rs 7.4 lakh to Rs 13.7 lakh. The key change is the addition of a 998cc Boosterjet turbo-petrol engine. Motilal Oswal believes this makes the Brezza more performance-oriented and qualifies it for the lower 18 per cent GST rate, compared with 40 per cent for the 1.5-litre version. This should improve the model’s competitiveness against compact-SUV rivals.

The facelift also includes six-speed manual transmissions for the existing 1.5-litre naturally aspirated petrol and factory-fitted CNG versions, a 10.1-inch infotainment screen, ventilated seats, improved connected-car technology and an underbody CNG cylinder that improves luggage space. Brezza has received a five-star Bharat NCAP rating for adult and child protection, while six airbags are now standard across variants.

Brezza had not fully captured the sharp improvement in compact-SUV demand after the GST changes because its tax reduction was less favourable than that of competing smaller-engine products. Motilal Oswal expects the new turbo engine, the more practical CNG configuration and the safety upgrade to increase Brezza volumes to about 20,000 units a month from around 15,000 units currently.

Domestic Demand and Product Pipeline

Motilal Oswal expects GST-related price cuts to make MSIL products more affordable, widening the gap versus micro-SUVs and used cars. Small-car sales remained strong through Q1 FY27. MSIL plans seven new SUVs by FY31, excluding the recently launched Victoris and e-Vitara.

The broker says Victoris has been well received and is causing minimal cannibalisation of Grand Vitara. It forecasts domestic volumes to compound at 12 per cent over FY26-FY28E. Utility vehicles are expected to remain a key contributor to this growth.

Export Growth Opportunity

Exports are another growth driver, although adverse global macro conditions may constrain performance in the near term. MSIL aims to reach exports of 7.5-8.0 lakh units by FY31, implying a 15 per cent volume CAGR.

Key actions include adding models in export markets, with Fronx and Jimny as leading export models; making India Suzuki’s EV export hub starting with eVX; launching six EVs by FY31; expanding market coverage; and extending distribution. Motilal Oswal estimates export volume CAGR of 18 per cent over FY26-FY28E.

Earnings Outlook and Margin Normalisation

The broker expects margins to normalise after a relatively weak Q1, supported by moderating raw-material costs and steady volume growth. Its FY27E and FY28E estimates imply the following financial performance:

Multi-Technology Strategy

The report highlights MSIL’s multi-technology approach, spanning hybrids, electric vehicles and flex-fuel-compliant vehicles. Motilal Oswal believes this approach is well suited to an Indian market that is not ready for a rapid transition to EVs.

Key Risks

• Weaker global macro conditions could affect exports.
• Vehicle-demand recovery could be slower than expected.
• Brezza and the new-launch pipeline may fail to deliver the anticipated volume and market-share gains.