Motilal Oswal Securities has maintained 'Buy' on Maruti Suzuki India (MSIL) with target price of Rs 2,665 as against current market price (CMP) of Rs 2,380 in its report.

Commenting on the investment rationale, the stock broker said, ''Maruti Suzuki India (MSIL) outlined the agreement details with Suzuki Motor Corporation (SMC) for expansion of Gujarat plant under 100% subsidiary of SMC, Suzuki Gujarat (SG), along with details of the term sheet.

As indicated earlier, MSIL would voluntarily seek minority shareholders' approval for this arrangement. The additional clarifications by MSIL on proposed expansion of Gujarat Plant further safeguards minority shareholders' interest.

With improved economic outlook and consequent improvement in discretionary income and consumer sentiments, we expect PV industry to rebound strongly over the next two to three years (benefiting from pent-up demand). Given its leadership position and three new launches (Celerio, Ciaz in 2QFY15 and compact SUV in 4QFY15), we expect MSIL to be a key beneficiary of the upturn in PV demand.

We estimate robust 26% EPS CAGR on 13.7% volume CAGR (implying 3.3% CAGR over FY11-16E) and margin expansion of 150bp over FY14-16E to 13.2%. The stock trades at 20.3x/15.9x FY15E/16E consolidated EPS of Rs 117.2/Rs 149.4. Maintain Buy.''

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