Maruti Suzuki: Record Sales, Shrinking Profits Amidst Rising Costs

Maruti Suzuki India reported record quarterly sales in the September quarter, with volumes up 26.5% year-on-year and revenue exceeding ₹50,600 crore. Despite this sales surge, operating earnings faced challenges, declining due to increased material costs and unfavorable foreign exchange rates, exacerbated by the West Asia conflict. Material costs escalated to nearly 80% of net sales, a significant increase from the previous year, squeezing profit margins. Operating EBITDA margin fell to 9.4% from 12.7% year-on-year.

The company's net profit for the quarter dropped to ₹2,414.9 crore from ₹3,302.8 crore in the same period last year. This decline was partly due to lower non-operating income stemming from mark-to-market losses on investments. Domestic sales remained robust, growing 33.6% with utility vehicles being a key driver, boosting Maruti Suzuki's market share to 40.8%.

Despite the year-on-year decrease, Maruti Suzuki's performance showed sequential improvement compared to the June quarter. Operating EBITDA rose approximately 10% quarter-on-quarter. However, factors like higher manufacturing overheads and continued commodity price pressures still impacted overall results for the first half of FY27, during which sales also reached record highs but profitability remained under pressure.