Maruti Suzuki India Limited

Maruti Suzuki reported record net sales of ₹388 billion in Q4 FY25, marking a 5.7% year-on-year increase from ₹367 billion in Q4 FY24. However, net profit for the quarter saw a slight decline of 4.1% YoY to ₹37.1 billion from ₹38.7 billion in the prior year. The company achieved its highest-ever quarterly sales volume of 604,635 units, driven by 2.8% domestic growth and 8.1% export growth. The EBIT margin sequentially compressed to 8.7% in Q4 FY25 from 10% in Q3 FY25, impacted by several operational and market factors.

For the full fiscal year FY25, Maruti Suzuki recorded its highest-ever annual sales of 2.23 million vehicles, including a record 3.32 lakh exports, marking a healthy 17.5% growth in exports. Net sales for FY25 grew 7.5% to ₹1,451 billion, with net profit increasing 5.6% to ₹139.5 billion. In recognition of this performance, the Board of Directors recommended an all-time high dividend of ₹135 per share, an 8% increase from ₹125 per share in FY24, reflecting a commitment to shareholder value.

The Passenger Vehicle (PV) industry clocked over 4.3 million units in FY25, experiencing a moderated growth of 2.5% compared to 8.4% in FY24, primarily due to a high base and affordability issues in the entry segment. Consumer preference continued its strong shift towards SUVs, which now account for about 55% of total sales, while the hatchback segment's share significantly shrunk to 23.5% from 46% in FY19. CNG and diesel powertrains each held about 18-19% share, with hybrids at 2.4% and EVs at 2.7%.

In FY25, Maruti Suzuki successfully launched two new models, the 4th generation Swift and the all-new Dzire, both receiving overwhelming customer response. For FY26, the company plans to launch two more new models, including the e VITARA, which was unveiled at Bharat Mobility Global Expo '25. Management expects to commence sales of the e VITARA within the first half of FY26, targeting a volume of about 70,000 units for the year, with a significant portion anticipated from exports.

The company achieved a historic production milestone of 2 million units in FY25, being the only PV manufacturer in India to attain this landmark. Commercial production at the new Kharkhoda Phase-I plant, with an annual capacity of 250,000 units, commenced in March '25. Maruti Suzuki also accelerated its captive solar power generation capacity to 78.2 megawatts peak (from 43.2 MWp in FY24) and achieved record dispatches of over 500,000 vehicles through rail mode, increasing rail's share in overall domestic dispatches to 24.3% from 21.5%.

The sequential EBIT margin decline to 8.7% in Q4 FY25 was attributed to multiple factors: 30 basis points from new plant overheads, 20 basis points from adverse commodity prices (steel), 40 basis points from an adverse product mix (higher small cars, lower UV/CNG share), 30 basis points from higher advertising expenses, and 90 basis points from other lumpy/seasonal expenses. These were partially offset by lower sales promotion and favorable operating leverage. Management acknowledged that Electric Vehicles (EVs) inherently have much lower profitability than Internal Combustion Engine (ICE) vehicles, a key consideration for future margin structures.

For FY25, the company's CAPEX was approximately ₹8,400 crores, and for FY26, it is projected to be in the range of ₹8,000 to ₹9,000 crores, excluding SMG. Management emphasized the company's strong cash position and commitment to shareholder returns, as evidenced by the record dividend of ₹135 per share. The company aims to expand its product portfolio to 28 models by the end of the decade, strategically leveraging potential consumption stimuli from government pay commissions to target growth segments.