Maruti Suzuki’s quarterly profit declined despite record vehicle sales and strong export growth.
Rising raw material, energy and logistics costs linked to the West Asia conflict weighed on earnings.
Highlights
- Maruti Suzuki’s Q1FY27 net profit fell 9.1% to ₹3,446.9 crore.
- Total sales volume jumped 29.3% to a record 6,82,724 vehicles.
- Consolidated total income increased 34% to ₹54,343.8 crore.
- Commodity pressures reduced operating margins by nearly 300 basis points.
- Domestic wholesale sales rose about 33%, while exports grew 28.6%.
- The company maintained its guidance of around 10% volume growth for FY27.
Story
Maruti Suzuki India reported a 9.1% year-on-year decline in its net profit for the April-June quarter of the 2026-27 financial year, as higher commodity, energy and logistics costs put pressure on profitability.
The country’s largest carmaker posted a net profit of ₹3,446.9 crore in the first quarter, compared with a higher profit in the same period last year. This was the second consecutive quarter of declining earnings for the company, even as vehicle sales reached a record level.
Maruti Suzuki’s overall sales volume increased 29.3% to 6,82,724 units during the quarter. Consolidated total income rose 34% to ₹54,343.8 crore from ₹40,493.4 crore a year earlier.
The company said the conflict in West Asia created uncertainty in its supply chain and pushed up the cost of commodities, natural gas, transportation and logistics. To ensure uninterrupted production, Maruti introduced temporary support measures for suppliers.
The carmaker shifted settlements for commodities such as aluminium, plastics and rubber from a quarterly cycle to a monthly cycle. This allowed suppliers to receive compensation for higher raw material costs more quickly, but the move also affected Maruti’s quarterly profitability.
Commodity-related pressures reduced operating margins by around 300 basis points. Nearly 110 basis points of this impact came from the temporary change in the commodity settlement cycle.
Higher natural gas prices, adverse foreign exchange movements, employee expenses and depreciation costs also affected margins. Lower fixed-cost absorption following a reduction in inventory created additional pressure.
Despite these challenges, domestic wholesale sales increased nearly 33% to more than 5.34 lakh vehicles, while exports rose 28.6%. Maruti said it contributed more than 85% of India’s passenger vehicle exports during the quarter.
The company currently exports to around 120 countries, with South Africa, Japan and Europe emerging as important markets. Demand remained strong in both cities and rural markets, while dealer inventory stood at around 13 days.
Maruti also commissioned a second plant at its Kharkhoda facility in Haryana and added a fourth manufacturing line at its Gujarat plant. Together, the new facilities added annual production capacity of five lakh vehicles.
The company retained its guidance of around 10% volume growth for the financial year. It has also announced price increases to partly offset rising input costs, with most of the benefit expected in the second quarter.
