ET Intelligence Group: Maruti Suzuki India reported a sustained sales growth even though operating profit and margins took a hit. Despite rising costs from new operations and higher overheads, the company expects to outperform the industry in the current fiscal year, supported by new electric and SUV launches and a strong export outlook. Analysts remain upbeat, projecting up to 20% upside in the stock.
Maruti posted its highest-ever quarterly sales volume at 604,635 units, a 3.5% rise year-on-year. Sales have been increasing sequentially for the company since the September 2024 quarter. Retail sales growth outpaced wholesales in FY25, driving a marginal gain in the market share. Rural markets continued to perform better in the March quarter and also in FY25.
Maruti's standalone net sales grew by 6% year-on-year as well as sequentially in the March 2025 quarter to ₹38,848.8 crore while net profit declined by 4% year-on-year but increased 5% sequentially to ₹3,711.1 crore. After rising to 11.1% in the June 2024 quarter from 10.8% in the March 2024 quarter, operating margin (EBIT margin) declined gradually to 8.7% in the March 2025 quarter due to higher manufacturing overheads and administrative expenses, new plant costs, increased advertising spend and adverse commodity prices. The new plant at Kharkhoda in Haryana has an initial capacity of 250,000 units, taking the total installed capacity to 2.6 million per annum. Its commissioning in March 2025 impacted the company's margin by over 30 basis points in the March quarter. Start-up costs of the plant are expected to normalise after another quarter, according to Motilal Oswal Financial Services.
Maruti has planned two launches in FY26, the e-Vitara and a new SUV to outpace the modest industry growth expectation of 1-2%. It anticipates export growth of at least 20% year-on-year, mainly driven by these launches. It aims to sell 70,000 e-Vitara units, with the majority allocated for export markets.
"Overall, next year's growth is likely to be driven by exports, SUVs, and a further increase in CNG penetration, said Motilal Oswal Financial Services in a report citing concerns over rising input costs including that of steel. With an emphasis on growing the EV, hybrid, and SUV portfolios, the auto giant plans a capex of ₹8,000-₹9,000 crore in FY26. It also anticipates the implementation of new CAFE (Corporate Average Fuel Efficiency) standards notified by the government, which will tighten fleet-wide fuel efficiency requirements for automakers in India.
Brokerages Emkay and Motilal Oswal have both reiterated their 'buy' ratings, citing favourable valuations and visible growth drivers. Emkay pegs a target price of ₹13,500, while Motilal Oswal is more bullish with a target of ₹13,985, implying 15-20% upside from current levels. Despite some near-term margin pressures, Maruti's multi-fuel strategy, strong export thrust, and robust launch pipeline position it well for sustained growth.
Maruti posted its highest-ever quarterly sales volume at 604,635 units, a 3.5% rise year-on-year. Sales have been increasing sequentially for the company since the September 2024 quarter. Retail sales growth outpaced wholesales in FY25, driving a marginal gain in the market share. Rural markets continued to perform better in the March quarter and also in FY25.
Maruti's standalone net sales grew by 6% year-on-year as well as sequentially in the March 2025 quarter to ₹38,848.8 crore while net profit declined by 4% year-on-year but increased 5% sequentially to ₹3,711.1 crore. After rising to 11.1% in the June 2024 quarter from 10.8% in the March 2024 quarter, operating margin (EBIT margin) declined gradually to 8.7% in the March 2025 quarter due to higher manufacturing overheads and administrative expenses, new plant costs, increased advertising spend and adverse commodity prices. The new plant at Kharkhoda in Haryana has an initial capacity of 250,000 units, taking the total installed capacity to 2.6 million per annum. Its commissioning in March 2025 impacted the company's margin by over 30 basis points in the March quarter. Start-up costs of the plant are expected to normalise after another quarter, according to Motilal Oswal Financial Services.
Maruti has planned two launches in FY26, the e-Vitara and a new SUV to outpace the modest industry growth expectation of 1-2%. It anticipates export growth of at least 20% year-on-year, mainly driven by these launches. It aims to sell 70,000 e-Vitara units, with the majority allocated for export markets.
"Overall, next year's growth is likely to be driven by exports, SUVs, and a further increase in CNG penetration, said Motilal Oswal Financial Services in a report citing concerns over rising input costs including that of steel. With an emphasis on growing the EV, hybrid, and SUV portfolios, the auto giant plans a capex of ₹8,000-₹9,000 crore in FY26. It also anticipates the implementation of new CAFE (Corporate Average Fuel Efficiency) standards notified by the government, which will tighten fleet-wide fuel efficiency requirements for automakers in India.
Brokerages Emkay and Motilal Oswal have both reiterated their 'buy' ratings, citing favourable valuations and visible growth drivers. Emkay pegs a target price of ₹13,500, while Motilal Oswal is more bullish with a target of ₹13,985, implying 15-20% upside from current levels. Despite some near-term margin pressures, Maruti's multi-fuel strategy, strong export thrust, and robust launch pipeline position it well for sustained growth.
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