💰 Financial Performance

Revenue Growth by Segment

Net sales for Q2 FY26 reached INR 40,135.9 Cr, representing a 9.6% sequential growth from Q1 FY26. H1 FY25 revenue grew 4.8% YoY, driven by a 4% growth in realizations and a shift toward Utility Vehicles (UVs). Export revenue for Q2 FY26 was reported at over INR 8,300 Cr.

Geographic Revenue Split

Domestic market volume share stood at 40.58% in H1 FY25, while the export segment share increased to 14.8% (up from 13.1% in H1 FY24). Export volumes grew 11.8% in H1 FY25, contrasting with a 3.2% decline in domestic volumes during the same period.

Profitability Margins

Operating margin for H1 FY26 was 11.9%, a decline from 13.8% in H1 FY25. Net Profit Margin for FY25 was 9.6% compared to 9.8% in FY24. The decline in H1 FY26 was attributed to a 100 bps increase in material costs and a 75 bps rise in sales promotion expenses.

EBITDA Margin

Operating EBIT margin stood at 8.5% in Q2 FY26, up 20 bps from 8.3% in Q1 FY26. This improvement was driven by favorable operating leverage (110 bps) and lower operating expenses (50 bps), despite higher sales promotions (-75 bps).

Capital Expenditure

The company plans to invest over INR 15,000 Cr per fiscal year to fund sizeable expansion plans, including the new manufacturing plant at Kharkhoda (Haryana) and a new plant in Gujarat. Net cash accruals of over INR 13,000-15,000 Cr per year are expected to support this.

Credit Rating & Borrowing

CRISIL has reaffirmed a 'CRISIL AAA/Stable' long-term rating and 'CRISIL A1+' short-term rating. The company maintains negligible debt levels with a debt-equity ratio of -0.001 as of FY25 and an interest coverage ratio of 406 times.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Platinum Group Metals (PGM), steel, and semiconductor chips. Material costs accounted for 76.5% of net sales in Q2 FY26, up from 75.5% in Q1 FY26.

Import Sources

Not explicitly disclosed in available documents, though Japanese Yen (JPY) forex exposure indicates significant sourcing or royalty linkages to Japan.

Key Suppliers

The company works with over 30 major supplier partners and maintains 100% training coverage for Tier-1 suppliers. Specific supplier names like SMC (Suzuki Motor Corporation) are mentioned regarding preferential allotments.

Capacity Expansion

Current plants are operating at nearly 90% capacity. Expansion is underway at Kharkhoda, Haryana, and a new plant in Gujarat to bolster market leadership and meet the 2030-31 production goals.

Raw Material Costs

Material costs rose to 76.5% of sales in Q2 FY26. Adverse commodity prices (specifically PGM) and unfavorable forex (JPY) impacted margins by 30 bps in the recent quarter. Procurement strategies include high indigenization and established linkages with component suppliers.

Manufacturing Efficiency

Capacity utilization is high at ~90%. Efficiency is driven by digitalization initiatives, including QR code-based safety rules and digital tracking of process optimization.

Logistics & Distribution

Not disclosed as a specific percentage of revenue, but the company maintains the largest distribution network in the domestic PV market as a core competitive strength.

📈 Strategic Growth

Expected Growth Rate

6%

Growth Strategy

The company targets a 50% market share and 10% EBIT margin by FY 2030-31. Strategy involves aggressive product launches in the UV segment, expanding the BEV portfolio for export (e VITARA), and commissioning new capacity at Kharkhoda and Gujarat to leverage 90% current utilization.

Products & Services

Passenger vehicles including small cars (entry-level PVs), Utility Vehicles (UVs), and Battery Electric Vehicles (BEVs). Services include taxi fleet solutions and defense agency supplies.

Brand Portfolio

VICTORIS, e VITARA, and various models in the Utility Vehicle and small car segments.

New Products/Services

The VICTORIS model was recently launched, securing 30,000 bookings by October 2025. The e VITARA (BEV) commenced exports in August 2025 with over 7,000 units shipped to Europe.

Market Expansion

Targeting a significant increase in export share (currently 14.8%) with a focus on European markets for EVs. Domestically, expanding capacity in Haryana and Gujarat to regain 50% market share.

Market Share & Ranking

Market leader in the domestic PV industry with a 40.58% share as of H1 FY25.

Strategic Alliances

Preferential allotment of equity shares to Suzuki Motor Corporation (SMC) for the acquisition of the Gujarat plant.

🌍 External Factors

Industry Trends

The industry is shifting toward Utility Vehicles (UVs) and Electric Vehicles (EVs). Small car demand is reviving due to recent GST reforms and reduced rates, which is a key monitorable for Maruti's volume recovery.

Competitive Landscape

Intense competition from domestic and international PV OEMs, particularly in the fast-growing UV segment where Maruti is aggressively expanding its portfolio.

Competitive Moat

Durable moat built on the largest distribution network in India, high brand trust, and cost leadership through 90% capacity utilization and high indigenization. These are sustainable due to the massive scale of the Kharkhoda and Gujarat expansions.

Macro Economic Sensitivity

Highly sensitive to interest rates and inflation which affect consumer financing. Sustainable industry growth is estimated at 6% YoY.

Consumer Behavior

Shift in consumer preference toward higher-priced UVs, which fetch better realizations, and a temporary rebound in small cars driven by festive euphoria and GST incentives.

Geopolitical Risks

Export momentum to Europe (7,000 e VITARA units) is subject to international trade regulations and carbon emission norms.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with evolving emission norms and safety regulations requires continuous R&D spend, which can impact return on investment if costs aren't fully passed to consumers.

Environmental Compliance

The company has a Board-level Sustainability Committee and an Executive Director for Sustainability. Focus is on reducing environmental impact through R&D in green technologies.

Taxation Policy Impact

The company benefits from GST reforms that reduced rates on small cars, aiding segment revival. Corporate tax rate impacts PAT (INR 32.9 billion in Q2 FY26).

Legal Contingencies

The company has a Code of Business Conduct and Ethics to manage anti-corruption. Specific pending court case values were not listed in the provided 'NA' summary for appealed actions.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material costs (PGM/Steel) and JPY forex fluctuations are primary risks. Sustaining the small car revival post-festive season is a key uncertainty with a potential impact on volume growth.

Geographic Concentration Risk

Heavy domestic concentration (85.2% of revenue), though exports are growing (14.8% share).

Third Party Dependencies

Dependency on Suzuki Motor Corporation (SMC) for technology and the Gujarat plant acquisition. Tier-1 suppliers are critical, with 100% training coverage maintained to mitigate supply risks.

Technology Obsolescence Risk

Risk of falling behind in the EV transition is being mitigated by the launch of e VITARA and the start of BEV exports to Europe.

Credit & Counterparty Risk

Superior liquidity with INR 61,505 Cr in liquid surplus and a debtors turnover of 26 times indicates high receivables quality.