Maruti Suzuki India Limited — Q4 FY25 earnings call

Call held 25 Apr 2025

Management summary

Maruti Suzuki reported a mixed Q4 FY25, achieving record sales volumes and net sales but experiencing a sequential decline in net profit and EBIT margins due to new plant operational costs, commodity price increases, and an adverse product mix. Despite these headwinds, the company posted its highest-ever annual sales and exports for FY25, demonstrating strong market leadership and operational efficiency, particularly in rail logistics and solar power. Management provided an optimistic outlook for exports and new model launches in FY26, while acknowledging the broader industry's moderated growth and the lower profitability of EVs.

Highlights

  • Q4 FY25 Net Sales reached a record ₹388 billion, up 5.7% YoY from ₹367 billion in Q4 FY24.

  • Q4 FY25 Net Profit was ₹37.1 billion, a decrease of 4.1% YoY from ₹38.7 billion in Q4 FY24.

  • Total sales volume in Q4 FY25 hit a record 604,635 units, with domestic sales growing 2.8% and exports 8.1%.

  • For FY25, the company achieved its highest-ever annual sales of 2.23 million vehicles, including a record 3.32 lakh exports (17.5% growth).

  • FY25 Net Sales grew 7.5% to ₹1,451 billion, and Net Profit increased 5.6% to ₹139.5 billion.

  • The Board recommended an all-time high dividend of ₹135 per share for FY25, up 8% from ₹125 per share in FY24.

  • EBIT margin sequentially declined to 8.7% in Q4 FY25 from 10% in Q3 FY25, impacted by new plant costs, adverse commodity prices, and product mix.

  • The company plans to launch two new models in FY26, including the e VITARA, targeting 70,000 units in FY26.

Concerns

  • Lower inherent profitability of Electric Vehicles (EVs)

Key financials

2 periods

Q4 FY25

  • Net Sales
    3,880 Bn
    YoY +5.7% QoQ +5.9%
  • Net Profit
    37.1 Bn
    YoY -4.1%
  • Total Sales Volume
    6,04,635 units
    YoY +3.5% QoQ +6.7%
  • EBIT Margin
    8.7%
    QoQ -13%

FY25

  • Net Sales
    14,510 Bn
    YoY +7.6%
  • Net Profit
    139.5 Bn
    YoY +5.7%
  • Total Sales Volume
    22,30,000 units
    YoY +4.6%
  • Dividend per Share
    ₹135
    YoY +8%

What they filed

Q1 FY27: revenue up 35.9%, net profit down 9.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue37,449 38,764 40,920 38,605 42,344 +13%49,904 +29%52,462 +28%52,470 +36%
EBITDA4,999 5,076 4,844 4,623 5,086 +2%5,573 +10%6,158 +27%4,313 −7%
Net profit3,102 3,727 3,911 3,792 3,349 +8%3,879 +4%3,659 −6%3,447 −9%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Volume

  • Exports Growth Volume · FY26 · High confidence at least 20%
    We hope to continue the momentum in exports in FY'26 as well and grow by at least 20%.

    — Pranav Ambaprasad

  • e VITARA Sales Volume Volume · FY26 · High confidence about 70,000 units
    So today in the press conference we mentioned that we hope to do the start of sales within the first half of the financial year and this year we expect to do a volume of about 70,000 units. A large part of it comes from exports.

    — Rahul Bharti

  • Domestic Market Growth Volume · FY26 · Medium confidence better than 1% to 2%
    On demand in the domestic market, industry has forecast a very modest growth of between 1% to 2%. We should be doing better than that.

    — Rahul Bharti

Product

  • New Model Launches Product · FY26 · High confidence two new models
    In FY'26 we plan to launch two new models. One of course is the e VITARA which you are aware of and another SUV.

    — Rahul Bharti

  • e VITARA Launch Timeline Product · H1 FY26 · High confidence within the first half of the financial year
    So today in the press conference we mentioned that we hope to do the start of sales within the first half of the financial year...

    — Rahul Bharti

  • Total Models Product · by the end of the decade · Medium confidence 28 models
    You have said that you want to get to 28 models by the end of the decade.

    — Chandramouli Muthiah (analyst, implicitly confirmed by management)

Capex

  • CAPEX Capex · FY26 · High confidence between Rs. 8,000 to 9,000 crores
    And the range we are expecting for next year is between Rs. 8,000 to 9,000.

    — Arnab Roy

Risks & concerns

  • Lower inherent profitability of Electric Vehicles (EVs)

    high

    Management stated that 'by design EVs will have a much lower profitability' compared to IC engines, posing a long-term margin challenge for the industry.

    Management acknowledged

  • Moderated PV industry growth and affordability issues in entry segment

    medium

    PV industry growth moderated to 2.5% in FY25 from 8.4% in FY24, with entry segment cars particularly affected by affordability issues.

    Management acknowledged

  • Shrinking hatchback segment share

    medium

    Hatchback share reduced to 23.5% in FY25 from a high of 46% in FY19, indicating a structural shift in consumer preference.

    Management acknowledged

  • Initial profitability impact from new Kharkhoda plant

    medium

    Overheads and depreciation associated with the new Kharkhoda plant (commercial production started March '25) caused a 30 bps hit on Q4 margin before full production scale-up.

    Management acknowledged

  • Volatility in commodity prices and global supply chain for rare earths

    medium

    The company is keeping a close watch on commodity movements and the supply chain for rare earths elements, noting the dynamic global situation.

    Management acknowledged

Areas of evasion (2)

  • Quantification of blended price hike
  • Specifics on Grand Vitara 7-seater

Q&A highlights

2 direct
Impact of other expenses and commodity prices on Q4 EBIT margin Direct
As Rahul articulated during the opening presentation, there are a few elements on the other expenses which has impacted like we had a higher profit for the full year, correspondingly, the CSR expenses are higher. There was also some repair and maintenance in some of our lines in the Manesar plant which contributed. Also, we did a conscious digitalization push and there were some expenses on digitalization... On a sequential basis; so, if you look at it, it is predominantly impacted by steel as you rightly pointed out.

Provided specific reasons for the sequential EBIT margin decline, differentiating between lumpy/seasonal expenses (90 bps) and commodity impact (20 bps).

Asked by Raghunandan NL

Profitability per vehicle and margin outlook given Q4 lows and seasonality Partial
See Pramod, it's always very difficult to predict margins. It's the resultant of many-many factors. The volume is easier to predict, margins depend on several factors. But what I can share with you is, Maruti Suzuki has far many more levers than any other car manufacturer in the country to handle any kind of headwinds or any kind of impact on margins.

Highlighted management's cautious stance on predicting future margins, emphasizing the complexity of factors and the company's relative resilience, but did not provide specific numerical guidance for margin recovery.

Asked by Pramod Kumar

Q4 product mix as a headwind (40 bps), export share, and CNG mix Direct
So, all these three mixes in a way were moved adversely for you. Export was down, small car share went up, SUV was down and CNG was down. But in your view mainly the domestic is defining the gross margin changes rather than exports share. ... For Quarter 4, the UV share sequentially came down from 39.7% to 36.8%, for Maruti Suzuki in Quarter 4 versus Quarter 3. CNG came down from 36.1% to 33.7%.

Provided specific data on the adverse shift in product mix during Q4 (higher small car share, lower UV and CNG share), directly explaining the 40 bps headwind and offering insight into domestic market dynamics.

Asked by Binay

3 min read 7 chapters

Detailed narrative

Q4 FY25 Financial Performance Overview

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.

Full Year FY25 Achievements and Shareholder Returns

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.

Industry Trends and Market Dynamics

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%.

Product Strategy and EV Transition

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.

Operational Efficiency and Capacity Expansion

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%.

Margin Headwinds and Outlook

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.

Capital Allocation and Future Investments

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.

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