Maruti Suzuki

Maruti Suzuki reported strong Q4 FY26 results with net sales of INR 500.79 billion, a 28.9% YoY increase, and operating profit exceeding INR 44 billion, up 30.4% YoY. The EBIT margin expanded to 8.8% from 8.1% sequentially. However, net profit declined by 6.9% YoY to nearly INR 36 billion, primarily due to a significant mark-to-market impact from hardening bond yields.

The Indian passenger vehicle industry saw a strong rebound in H2 FY26, growing 16.7% YoY, largely driven by GST reforms reducing acquisition costs for small cars. Maruti Suzuki's domestic sales volume grew 12.3% in H2 FY26, a significant swing from a 5.6% decline in H1. Q4 retail sales were up 12.9% YoY to 468,700 units, indicating robust demand.

The company strengthened its mid-SUV segment with the successful launch of the VICTORIS, which crossed 50,000 cumulative sales and received the Indian Car of the Year Award. Maruti Suzuki also launched its first battery electric vehicle, the e VITARA, designed for Indian and global markets, receiving encouraging initial responses. The company now offers 6 airbags as standard in over 99% of its PV lineup and achieved 5-star Bharat NCAP ratings for new models like Dzire, VICTORIS, e VITARA, and Invicto.

To address strong demand and 190,000 unserved customer orders (130,000 in small cars), Maruti Suzuki is accelerating capacity expansion. The second plant at Kharkhoda and the fourth production line at Hansalpur, Gujarat, will become operational this fiscal year, each adding 250,000 vehicles annually. The company plans to increase total production capacity to 4 million units per annum in the medium term, with a planned capex of INR 14,000 crores for FY27.

The sequential improvement in EBIT margin to 8.8% was driven by favorable factors including lower employee costs (100 bps), reduced discounts (50 bps), favorable foreign exchange movement (30 bps), and fixed cost incidence (50 bps). These positive factors were partially offset by adverse commodity prices (80 bps) and higher new model expenses (60 bps), indicating ongoing cost pressures.

Exports remained a significant growth driver, with volumes growing strongly in FY26, reinforcing Maruti Suzuki's position as the leading exporter of passenger vehicles. The company contributed 49% of India's total passenger vehicle exports in FY26, achieving its highest-ever annual export volume of 447,000 vehicles, demonstrating a diversified presence across global markets.

The operating environment remained complex due to geopolitical developments, impacting supply chains, energy, and raw material costs. The company faced a significant mark-to-market impact of INR 7.5 billion on its invested surplus due to hardening bond yields, which directly affected net profit. Despite these challenges, management maintains strong confidence in India's economic resilience and is optimistic about achieving a 10% EBIT margin by 2030, subject to easing external headwinds^🌐.