Maruti Suzuki India Ltd reported a 26.4% year-on-year decline in consolidated net profit to ₹2,466.1 crore for the quarter ended September 30, 2026, marking the third consecutive quarterly decline as the company grapples with sustained margin pressure. According to The Economic Times, the results were announced on Tuesday, showing a stark contrast between strong top-line growth and sharp earnings contraction. Revenue from operations rose 26% to ₹53,356 crore from ₹42,344.2 crore in the year-ago period, while total sales volume increased 26.5% to 6.97 lakh units, demonstrating robust business expansion despite profitability challenges. The company achieved 40.8% market share with strong demand for small cars and SUVs, as reported by The Economic Times. EBITDA margin contracted to around 8.9% from 12% a year earlier, while operating profit (EBIT) decreased to ₹2,804 crore from ₹3,382 crore a year earlier due to "West-Asia conflict linked commodity increases," with total expenses surging 30% to ₹50,619 crore. Non-operating income declined sharply in Q2 owing to mark-to-market losses on invested surplus, as the company explained the rationale behind the sharp drop in profit. The shares of the company are down 31% this year so far, underperforming Nifty50 by 18%, and are trading at a reasonable 20x FY28 PE, according to Jefferies.
Maruti Suzuki achieved its highest-ever quarterly sales of 696,654 units, up 26.5% YoY, driven by domestic dispatches of over 565,000 units (+37.8% YoY), partly offset by exports of 108,119 units (-2% YoY). According to Choice Institutional Equities, net sales reached a record over ₹506 billion, as compared to ₹401 billion in Q2FY26. Operating EBITDA margin has improved to 8.9% from 8.2% quarter-on-quarter, indicating some recovery was already underway. Choice Institutional Equities upgraded Maruti Suzuki to 'Buy' from 'ADD' with a target price of ₹13,500, valuing it at 22x average FY28/29E EPS, despite lowering the target from ₹15,350. The company has a strong order book of 270,000 units at the end of Dussehra, with inventory of just 17 days, below normal levels, supporting confidence in meeting domestic volume growth guidance. Festive sales are up 30% YoY since Onam, with the company not seeing any weakening in rural demand. The pending order book rose to 2.7 lakh units, providing strong visibility on demand in the coming months. Maruti Suzuki shares recorded marginal gains on Wednesday after the results announcement, as the company's strong revenue growth and growth guidance provided some support to investor sentiment.
The company's EBITDA margin fell by more than three percentage points to 8.9%, underscoring the significant squeeze on profitability despite operational improvements. According to CNBC TV18, EBITDA margin came in at 8.9%, expanding 71 basis points sequentially and exceeding consensus expectations, supported by cost-reduction measures, price hikes and the gap between retail sales and wholesale dispatches. Sequentially, this translated to a growth of 10.8% from the June quarter, indicating some recovery was already underway. Total costs jumped 30% to ₹50,619 crore, with raw material costs surging 48% from the same quarter last year. Operating EBIT margin came at 5.5%, down from 8.4% from a year ago, reflecting the significant impact of input cost inflation. Operating profit (EBIT) decreased to ₹2,804 crore from ₹3,382 crore a year earlier due to "West-Asia conflict linked commodity increases," as reported by The Economic Times. Net profit is projected to decline 13% quarter-on-quarter from ₹3,352 crore, while revenue is expected to rise 3% from ₹52,456 crore. Adverse commodity prices due to the Middle East conflict, currency movements and mark-to-market losses on invested surplus were some of the negative factors that dragged down margins in this quarter.
Choice Institutional Equities upgraded Maruti Suzuki to 'Buy' from 'ADD' with a target price of ₹13,500, valuing it at 22x average FY28/29E EPS, while Antique Stock Broking maintained a 'Buy' rating with a revised target price of ₹13,560 (earlier ₹15,710), implying ~19% upside from current market price. According to The Economic Times, Jefferies noted that the shares are down 31% this year so far, underperforming Nifty50 by 18%, and are trading at a reasonable 20x FY28 PE. Elara Capital retained a 'Buy' call with a target of ₹15,378 (lowered from ₹17,298), despite cutting FY27E-29E EBITDA estimates by 4-9% and EPS estimates by 7-15% due to elevated commodity inflation. HSBC has a 'Buy' rating with a price target of ₹14,500, while Nomura maintains a 'Buy' rating with a price target of ₹13,046. Nomura highlighted the company's strong guidance for the second half of FY27, with management expecting 10% domestic growth and flat exports, leading to 7-10% total growth, which is ahead of its expectations and is positive. Nomura noted that with low inventory, channel filling will support wholesale even if retail slows down, though it remains watchful of demand risks in FY28, particularly for hatchbacks, considering the risks from higher interest rates, inflation, weak monsoons and oil prices. Nomura, however, prefers Mahindra & Mahindra and Hyundai Motor India among the four-wheeler makers.
Maruti Suzuki raised its full-year growth outlook to the mid-teens from around 10% earlier, with the company expecting overall volume growth of 7%–10% in the second half of FY27, with domestic sales growing at least 10%. According to The Economic Times, the company has a strong order book of 270,000 units at the end of Dussehra, with inventory of just 17 days, below normal levels, supporting confidence in meeting domestic volume growth guidance. Festive sales are up 30% YoY since Onam, with the company not seeing any weakening in rural demand. The pending order book rose to 2.7 lakh units, providing strong visibility on demand in the coming months. The company plans to showcase and launch more electric vehicles, including a major launch at the Bharat Mobility Global Expo next year. Exports are expected to be flat or slightly higher than last year, with production and ramp-up of models such as the e Vitara expected to gather pace over the next few months. Maruti Suzuki shares recorded marginal gains on Wednesday after the results announcement, despite the sharp profit decline, as the company's strong revenue growth and growth guidance provided some support to investor sentiment. While concerns around margin trajectory remain, analysts largely retained a positive outlook over the medium term, driven by strong domestic demand and balance sheet strength. They believe the recent correction in the stock, 15% in two months, captures the margin downgrade and provides a good entry point for investors.
Maruti Suzuki is watching for signs of a slowdown in rural demand due to deficient monsoon rains in some states, though the company has yet to see an impact during the ongoing festive season. According to The Economic Times, RC Bhargava, chairman of Maruti Suzuki, said despite the challenging environment due to several geopolitical crises, domestic demand remained strong supporting higher sales. "We have not seen this kind of growth in sales in many years," he noted. Partho Banerjee, senior executive officer of marketing and sales, said during a post-results media conference that "Some of the states are facing stress (owing to El Niño effect). Rajasthan, MP, Karnataka, I am aware of it. So I would say let's wait and watch. But so far, we are not seeing the impact because it is festival time." The company reported a pending order book of nearly 200,000 units at the end of September, which provides some visibility on demand in the coming months. Earlier this year, tractor makers warned that the potential impact of El Niño on the monsoon could hurt sales growth by affecting farmers' earnings. The New Brezza has received a strong response, with first-time buyers accounting for 51% of sales, indicating positive momentum in the company's product portfolio.
