Maruti Q2 net misses street view despite record quarterly sales

New Delhi: Maruti Suzuki missed Street estimates to report a 26% year-on-year decline in consolidated net profit at ₹2,466 crore for the fiscal second quarter as higher input costs and lower other income outweighed an increase in revenue spurred by record car sales. India's largest carmaker posted a year-earlier net profit of ₹3,349 crore.

Operating profit (EBIT) in the three months ended September 30 fell to ₹2,803.7 crore from ₹3,382 crore a year earlier due to "West-Asia conflict linked commodity increases," the company said in a statement. Sequentially, this translated to a growth of 10.8% from the June quarter. Other income more than halved to ₹430 crore last quarter from ₹966 crore a year earlier due to mark-to-market losses on invested surplus.

Revenue from operations increased 26% to ₹53,355.5 crore last quarter. Total expenses surged 30% to ₹50,619 crore.


Maruti Suzuki chairman RC Bhargava 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 said. "GST 2.0 was a watershed moment which helped support demand in a fairly hostile environment. There are two ongoing wars. The car industry, and certainly Maruti Suzuki, has had a good half year."

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Maruti Suzuki said it achieved its highest-ever quarterly total sales volume of 696,654 units, a growth of 26.5% from a year earlier. Growth in the domestic passenger vehicle market was broad-based, with small car sales rising by 36% and SUV sales by 68%. Overall, the company's domestic market share expanded by 2.2 percentage points to 40.8% in Q2FY27.

Maruti Suzuki said while recent capacity additions have enabled it to serve continued strong consumer appetite, demand continues to outpace supply resulting in a low network inventory of about 17 days and pending bookings of about 200,000 units at the end of September. The company exported 108,119 cars last quarter, compared to 110,487 cars a year earlier amid global geopolitical uncertainties.

Bhargava said though monsoons were deficient this year, the outlook remains positive given the long-term strength of the Indian economy and people's aspirations. He said the GST reforms have improved affordability spiking demand from buyers at the lower end of the middle class. As many as 398,000 small cars were sold by the company in the first half of the year, compared to 162,000 SUVs.

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"Despite what people said there is and there will continue to be a demand for small cars in India, given the size of our population," he said. Hisashi Takeuchi, managing director said while currently sales are "pretty good", the car industry has to ensure that the momentum is maintained going forward. He said given high raw material costs, the company would have to take some price hikes in the second half of the year but would do so at an "appropriate time" and in a calibrated manner.

Overall, Maruti Suzuki expects to grow in the second half of the fiscal despite a high base.