Maruti Suzuki Q2 net profit falls 26.4% to ₹2,466 cr on higher costs

Maruti Suzuki India Ltd (MSIL) reported a 26.4 per cent (Y-o-Y) decline in second quarter 2026-27 (Q2FY27) consolidated net profit to ₹2,466.1 crore from ₹3,349 crore in the year-ago period, as rising commodity prices and adverse foreign exchange (forex) movements pushed up costs, while losses on its mutual fund (MF) holdings reduced income from investments.

The carmaker’s Q2 consolidated revenue from operations rose 26 per cent to around ₹53,355 crore from ₹42,344.2 crore in the year-ago period. However, total expenses increased at a faster pace, rising around 29.7 per cent Y-o-Y to approximately ₹50,619 crore. This meant that the increase in expenses outstripped revenue growth, squeezing profitability despite higher sales.  

The company has already increased prices three times in recent months and is also looking to control expenses, including marketing spending, the management informed during the press conference. 

MSIL Chief Financial Officer (CFO) Arnab Roy said the company’s operating performance had improved sequentially, with its operating earnings before interest, tax, depreciation and amortisation (ebitda) margin rising to 9.4 per cent in Q2 from 8.6 per cent in the previous quarter. Ebitda measures earnings from core operations before certain costs. 

Depreciation was higher due to capital expenditure, while mark-to-market adjustments on MF investments affected the company’s profit before tax (PBT), Roy said.

“But if you take that out operationally, both ebitda and ebit have increased,” Roy said. Ebit, or earnings before interest and tax, measures profit from operations after depreciation. 

MSIL said improved realisations, operating leverage and cost-reduction efforts helped offset some of the pressure from commodity prices and foreign exchange movements.

The company had sold 696,654 vehicles in Q2, up 26.5 per cent Y-o-Y. Its presentation attributed pressure on margins due to higher commodity prices amid the West Asia conflict, unfavourable forex movements and lower non-operating income. Improved realisations and cost-reduction efforts partly offset these pressures.

“We have already increased the prices three times till now in FY27. We are trying to manage all the expenses at the same time. If you compare Q2 against Q1 of this year, we are making some recovery… In the next six months, we are planning to do some kind of price increase at an appropriate time. That will further improve our profit situation," said Hisashi Takeuchi, managing director and chief executive officer of MSIL, during a video press conference: 

India's largest carmaker is attempting to recover higher input costs without passing the entire burden on to customers at once, while protecting demand in a market that has recorded strong growth.

MSIL Senior Executive Officer (Marketing and Sales) Partho Banerjee said demand for CNG vehicles had been strong, partly because of higher fuel prices. The company is working with its supply chain and production teams to meet demand, even though CNG kit availability currently remains a constraint.

Rural market penetration increased by 2.2 percentage points to nearly 52 per cent in the first half of FY27, Banerjee informed. However, he cautioned that the impact of deficient rainfall could emerge in some states, including Rajasthan, Madhya Pradesh and Karnataka. The India Meteorological Department’s rainfall data showed a deficit of nearly 20 per cent, he said, though Maruti had not yet seen a significant effect on demand during the festive season.

MSIL Chairman R C Bhargava said small cars would continue to have a sizeable market in India even in 2047, when the country is expected to be among developed nations, as a large section of the population would continue to need affordable mobility.

He said India’s car market would remain diverse, with buyers at different income levels seeking vehicles across price ranges. “We are going to have different levels of people in the economy, starting from the top most cars, Maybachs and the Porsches… and still going down to the Maruti Alto... There will be a market for people in all ranges,” he said.