Maruti Suzuki India Limited (NSE: MARUTI) Q3 2026 Earnings Call dated Jan. 28, 2026
Corporate Participants:
Rahul Bharti — Chief Executive Officer
Analysts:
Pranav — Analyst
Gunjan Prithiani — Analyst
Presentation:
operator
Ram. It, Sam. Foreign. Ladies and gentlemen, good day and welcome to the Maruti Suzuki Q3 FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Pranav. Thank you. And over to you, sir.
Pranav — Analyst
Thank you, Rayu. Ladies and gentlemen, good afternoon once again welcome you all to the Q3 FY26 earnings call. May I introduce you to the management team from Maruti Suzuki? Today we have with us the Chief Invest Relations Officer Mr. Rahul Bharti and CFO Mr. Adna Broi. Before we begin, may I remind you of the safe harbor we may be making some forward looking statements that that have to be understood in conjunction with uncertainty and the risks that the company faces. I also like to inform you that the call is being recorded and the audio recording and the transcript will be available at our website.
But please note that in case of any inadvertent error during this live audio call, a transcript will be provided with the corrected information. The con call will begin with a brief statement on the performance and outlook of a business by CARO and Chief Senior Executive Officer, Corporate Office, Mr. Rahul Bharti. After which we’ll be happy to receive your questions. I would now like to invite our CEO Mr. Rahul Bharti. Over to you, sir.
Rahul Bharti — Chief Executive Officer
Thanks, Pranav. Good afternoon ladies and gentlemen and thank you for joining us. We are happy that after a long time the growth in passenger vehicle industry has bounced back. After the government’s historic GST reform, it is not common that the taxes are reduced by about 5 to 10% on items in a single stroke. Given the magnitude of this measure, it was expected to show some manifestation in terms of market growth. The passenger vehicle industry, which had experienced A decline of 0.4% in the first half of the financial year 26 sprang to a whopping 20.5% growth in the third quarter as compared to Q3 last year.
Maruti Suzuki benefited even more. Our sales volume growth in domestic market bounced back to a robust 22% in the Q3 of FY26 compared to a decline of 5.8% in the first half of FY26. The primary driver of our sales volume growth in quarter three compared to the same period last year has been the small car segment in the 18% GST bracket. Fortunately for Maruti, Suzuki the demand is robust across the whole spectrum. We had to work on Sundays and holidays to meet the demand. We blocked our highest ever retail sales of over 683,000 units in quarter three of this year.
With this, we ended quarter three with a very low network inventory of just about three to four days along with a healthy order book of around 175,000 vehicles. Once again, I’m happy to share that the Indian consumer has demonstrated her true strength and she’s the one who’s actually driving us. We are the ones to follow and at present we are constrained by supplies. As a market leader, we have always mentioned that we have responsibility across all segments ranging from the compact mass segment vehicles to premium SUVs. You are aware that we have undertaken a series of SUV launches with the most recent launch being the victoris.
I vividly remember that when we had launched the Victorious, I asked my marketing colleague Patva San about the product. They said, Rahul Khan, taste the product. It is the SUV that has got it all. When we look at the styling, the features, the infotainment, the theater on wheels experience, the level 2 ADAs, underbody CNG and of course the looks, actually the Victorious has got it all. And no wonder that the Victorious got the Indian Car of the year award when 19 prominent auto publications form a jury and together vote for the best car in the country.
Now we have a happy problem of meeting the market demand. I remember that on August 15th when the GST reform was announced, our top management immediately advised to accelerate our capacity expansion plans. So our second plant at the Kharkoda facility is scheduled to be operational by April 26 and soon after in Gujarat, the D line, which is the fourth line at our existing Gujarat facility will also be commissioned. Each will have a capacity to produce about 250,000 vehicles annually. Additionally, we have also announced our plan to set up a second greenfield manufacturing facility in Gujarat.
The GST reform has not only boosted consumption but has also accelerated private capex coming to exports. We continue to grow faster than the rest of industry. In calendar year 25, Maruti Suzuki commanded nearly 46% share in passenger vehicle export from India. Till December 25, we have exported over 13,000 units of Evitara to 29 different countries for which we have a plan to for about 100 countries. Plus. Before we move to the financial results, since investors like some flavor of the business, may I share some major highlights for the company? Maruti Suzuki has set a new benchmark in industry by achieving cumulative sales of 30 million units in the domestic market.
This historic milestone has been attained within 42 years, reflecting the company’s sustained leadership and deep customer trust. This was the second consecutive calendar year in which the company crossed annual production volume of 2 million units, reflecting our strong focus on meeting customer demand across both domestic and export markets. Our true suv, the Jiminy five Door has achieved a landmark milestone surpassing a cumulative export figure of 100,000 units from India. Jimny’s strong off road DNA, reliable performance and uncompromising quality have earned admiration in over 100 countries. The Evitara, the company’s first electric vehicle, secured a comprehensive 5 star safety rating in Bharat and CAP, strengthening the company’s 5 star BnCap rated vehicle portfolio alongside the all new Desire, the Victorious and the Invicto, further strengthening the company’s robust network of 2000 exclusive charging points across our sales and service network spanning across 1100 cities, we have collaborated with 13 ChargePoint operators to offer access to a vast charging infra across the country.
Aligned with Suzuki’s global vision, we plan to introduce multiple EVs and to support this, our aim is to enable a network of over 100,000 charging points across India by 2030. Along with our dealer and charge point operators for promoting inclusive mobility in mass segment cars, we introduced a very small sweet step, the option of a Swival Seat. Swival Seat in the Wegener is specially designed to offer greater convenience to senior citizens and persons with disabilities, bringing the joy of mobility to them. Drawing inspiration from Suzuki’s group corporate slogan buy your side. This initiative aligns with the United Nations Sustainable Development Goal that aims to reduce inequality.
The company also celebrated a historic milestone of 3.5 million units of cumulative production across three generations of the iconic Wagonr. This milestone marks the extraordinary journey of trust and emotional connect of the brand with billions of customers across India. Recently the company inaugurated its 5000th arena service, Touchpoint and 1500 parts and accessories distributed Touchpoint in India, reflecting the company’s commitment to provide hassle free and delightful car ownership experience to customers across the country. The Maruti Suzuki Smart Finance, India’s first digital car financing platform, has reached a significant milestone surpassing dispersal of 2.5 million car loans worth rupees 170,000 crores or is that 170 billion about 1700 billion rupees since its inception in the financial year 21.
Now coming to the financial results. During quarter three of the financial year 26, the company registered its highest ever quarterly net sales of about Rs 475 billion, up from about Rs 368 billion in the same period of previous year. The net profit for the quarter stood at about rupees 38 billion compared to rupees about 36.5 billion in quarter three of previous year. Net profit was impacted by a one time provision of rupees 5939 million on account of the new labor codes. Before we delve into the explanation of results, I would like to inform that Suzuki Motor Gujarat Private Limited, a wholly owned subsidiary of Maruti Suzuki, amalgamated with MSIL starting 12-01-2025.
The appointed date of the scheme of amalgamation is 04-01-2025. So the standalone financial statements have been restated with effect from 04-01-2025 and there is no impact on the consolidated financial results. The following are the broad changes in the accounting of SMG cost shed on MSIL standalone financial results. The first is prior to amalgamation in the material cost rate of MSIL standalone numbers, the cost of completely built unit manufactured at SMG excluding the depreciation expense was getting accounted. The cost of CBU included component cost of vehicles manufactured at smg, the employee cost and the overheads of smg.
These expenses were netted with other operating income such as income from scrap sales et cetera. After amalgamission. Now only the component cost of vehicles manufactured at the Gujarat facility will get accounted in the material cost shed. Thus all the items will move to their respective natural heads. Prior to the amalgamation, the depreciation of SMG facility was getting accounted as lease rent under other expense cost head of MSIL standalone numbers. After the amount of dimation, the depreciation will move to its natural head. Due to this regrouping, EBITDA will be adjusted upwards and on the ebit. There is no major change at the EBIT level due to amalgamation.
Now I’ll come to the financial performance in the quarter three of our financial year 26 and since investors look for a sequential comparison, I’ll share on a sequential basis. The overall sales volume grew by 21.2% and the net sales grew by 18.4%. Sequentially, the operating profit margin EBIT has reduced to 8.1% of net sales compared to 8.4% in quarter two of financial year 26. There were several unfavorable factors like one adverse commodity prices of about 60 basis points largely on account of PGM aluminium and copper adverse impact due to rare earth element supply issues of about 20 basis points unfavorable fixed cost incidents on account of inventory depletion of about 50 basis points, unfavorable foreign exchange movement of about 15 basis points, price reduction in few models of about 70 basis points and a one time provision on account of the new labor codes leading to higher employee cost of about 125 basis points.
These unfavorable factors were partially offset by favorable operating leverage of about 190 basis points, lower discounts and favorable product mix of about 120 basis points. Now I come to the highlights of the nine month financial results. Nine month period, the company recorded its highest ever monthly sales volume, net sales and net profit in this period. The company sold a total of 1,746,504 units during the period compared to 1,629,639 units in the same period previous year. Sales in the domestic market stood at 1,435,945 units and exports at 310,559 units. The company registered net sales of Rupees 1242 billion in the nine month period as compared to about Rupees 1,063 billion in the same period.
Previous year. The company made a net profit of about rupees 108.5 billion in the nine month period as against rupees 104.4 billion in the nine months period of financial year 25. With that, we are now ready to take your questions, feedback and any other observations that you may have. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Gunjan Prithiani from Bank of America. Please go ahead.
Gunjan Prithiani
Hi, thanks for taking my question. Just looking for a bit of clarification on the numbers that you share on the margin grade. Can you talk about The PGM impact? The 60 basis point that you called out is that do we see further pressures on this front and what is it that we are looking to do in terms of mitigating these incremental cost headwinds that we are seeing? So a bit more color on the commodity inflation would help. And I think I just need a clarification on this, the rare earth thing also. What is it? Actually, if you can share more information, how big, how significant this impact depends on this record.
Rahul Bharti
Okay, so we are seeing some kind of headwinds in commodities at the moment in platinum, palladium, rhodium and aluminum and copper. And some of these are also being discussed across sectors. Some of these have to do with the AI memory chips, etc. Also in terms of rare earth, we mentioned that instead of importing just the magnets, we were constrained to import larger aggregates or sub assemblies of which magnets were child parts. So to that extent higher imports and along with that some airfitting costs, etc. So there’s a rare earth has a minor impact of about 20 basis points.
But the good part is that the Government of India has invited with a scheme to invited global manufacturers to make rare earth magnets in India. So this won’t be a long term problem. Sooner or later India will manufacture rare earth magnets.
Gunjan Prithiani
And how much more to go from a precious, I mean maybe just bit more on precious metals? How significant is it in terms of the commodity cost? Is there more headwind to go going into quarter four as well?
Rahul Bharti
As of now we have not taken a view onto the future. But yes, we can mention to you that the PGM content as a percentage of net sales in the car is about 2% and these are commodities which are very which are in the public domain very well researched. So your commodity analysts can also throw some light on that.
Gunjan Prithiani
And the second question is on the demand outlook. I mean you clearly sound very confident on at least the near term demand given the pending order book, victorious launch, etc. Now that it’s been couple of months post GST, would you be able to share a little bit more color on how do we look beyond quarter four going into fiscal 27 industry growth and how do we see Maruti performing related to that? Any product action, anything that you can share more in terms of next year growth outlook?
Rahul Bharti
So as I mentioned in the immediate short term of course we are constrained by supply and we are struggling to meet demand as much as possible. We have a healthy order book share within the SUV segment is growing. So all positive. Having said that, the query remains in our mind what is the sustainable level of demand after the euphoria is over? So I think. [Ends Abruptly]