MARUTI Q4 Call Highlights: Compact SUV Push, EV Profitability and Capex Plans!

Maruti Suzuki India Limited, the largest automobile manufacturer in India, specialising in small cars, in its Q4 earnings call clarified that elevated expenses stemmed from CSR, maintenance, and digitization, with plant-related costs of INR120 crore fully accrued and set to normalize in Q1 FY26 as sales ramp up. Steel safeguard duties had no direct impact, and FTAs with the UK, EU, and US are under discussion. Management mentioned that domestic growth is projected at 1-2%, with exports expected to surge 20%, despite EBITDA per vehicle hitting a two-year low due to an adverse mix. Price hikes offset costs, including six-airbag mandates, while the e-Vitara EV launch targets 70,000 units in H1 FY26, mostly for exports. FY26 capex is set at INR8,000-9,000 crore, with flexible plants to support EV production, though EVs face lower profitability than ICE vehicles.

Maruti Suzuki India reported a marginal 1% YoY decline in Q4 FY25 consolidated net profit to INR3,911 crore, missing estimates due to weak small car sales (down 9% YoY) and higher commodity prices, despite a 6.4% YoY revenue increase to INR40,920 crore, driven by record quarterly sales of 604,635 units (up 3.5% YoY) and an 8% export surge to 85,089 units. EBITDA fell 7.2% YoY to INR4,844 crore with a 12% margin, impacted by an 8.7% rise in expenses, including new plant costs. For FY25, net profit rose 5.6% to INR13,955 crore, with exports up 17.5% to 332,585 units. In the quarter, Maruti launched the e-Vitara electric SUV, established the Osamu Suzuki Centre of Excellence for innovation, and enhanced the Super Carry with ESP safety features, while announcing a $864 million investment for a new Haryana plant to boost capacity by 750,000 units by 2029.

Continue Reading: Unearth the Vital Insights from Maruti Suzuki India Limited’s Earnings Call!

Financial/Operational Metrics:

• Revenue: INR40,920 crores, up 6% YoY.
• Net Income: INR3,911 crores, down 1% YoY.
• EPS: INR124.4, down 1% YoY.
• Operating Income: INR4,844 crore, down 7% YoY.

Outlook:

• Exports Growth Target: At least 20% growth expected in FY26.

 

 

Analyst Crossfire:

• Other Expenses and Commodity Impact (Raghunandan NL – Nuvama Research)? Other expenses rose 90 basis points QoQ due to lumpy, seasonal items like higher CSR expenses, monitor plant maintenance, and digitization costs, expected to normalize in subsequent quarters. Steel price increases and safeguard duties had a 20 basis point impact, but the minimum import price structure protects Maruti, with no direct impact as imports exceed thresholds; the company will monitor steel price hikes (Rahul Bharti – Executive Director).

 

• Profitability Per Vehicle & Export and Domestic Growth Outlook (Pramod Kumar – UBS Securities)? EBITDA per vehicle hit a seven-quarter low despite record volumes, driven by multiple factors like adverse mix and new plant costs. Maruti has more levers than peers to manage margin headwinds, with exports cushioning low domestic demand (1-2% growth forecast); the company prioritizes addressing stagnant entry-level car sales to boost manufacturing. Maruti forecasts 20% export growth in FY26, supported by a strong order backlog, despite global macro challenges. Domestic market growth is projected at a modest 1-2%, with potential upside from two new SUV launches, though success depends on organizational response to customer demand (Rahul Bharti – Executive Director).

 

• Mix and New Plant Costs (Binay – Morgan Stanley)? A 40 basis point margin headwind stemmed from an adverse domestic mix, with SUV share dropping to 36.8% from 39.7% and CNG share to 33.7% from 36.1% QoQ, alongside lower small car sales. New plant startup costs (30 basis point impact) were elevated in Q4 as production began in February without sales; these costs will normalize in Q1 FY26 as sales align with expenses (Rahul Bharti – Executive Director).

 

• Commodity and Price Hike Strategy & e-Vitara Launch and Export Timeline (Gunjan Prithyani – Bank of America)? Safeguard duties on steel have no direct impact due to Maruti’s import grades, but rising steel prices are monitored closely. Price hikes in February and April offset cost increases, including regulatory requirements like six airbags, with no net margin gain; blended hike details were not quantified. The e-Vitara electric SUV is set for domestic sales in H1 FY26, targeting 70,000 units annually, predominantly for exports, enhancing Maruti’s global EV presence (Rahul Bharti – Executive Director).

 

• Capex Outlook & Product Pipeline and Consumption Stimulus (Jinesh Gandhi – Analyst, Chandramouli Muthiah – Goldman Sachs)? FY26 capex is projected at INR8,000-9,000 crore, including Suzuki Motor Gujarat (SMG), compared to INR8,400 crore in FY25, supporting capacity expansion and EV production. Maruti aims for 28 models by decade-end, focusing on compact SUVs and premium hatchbacks to leverage potential consumption boosts from central/state pay commissions, though the scale and impact remain uncertain (Rahul Bharti – Executive Director).

 

• Sourcing and Supply Chain Strategy & EV Profitability and PLI Schemes (Pramod Amti – InCred Equities)? Maruti’s steel sourcing is 85-90% localized, unaffected by safeguard duties, with vigilance on potential domestic price hikes. Global supply chain risks, particularly for rare elements, are monitored, but sourcing remains stable. EVs inherently have lower profitability than ICE vehicles, necessitating government incentives like 5% GST. Exports improve EV economics via scale and pricing power, but PLI scheme benefits remain uncertain pending post-SOP data verification (Rahul Bharti – Executive Director).