Maruti Suzuki Q1 Results Preview: Weak Demand To Weigh On Profit, Margin To Contract
Higher raw material costs, especially steel and platinum group metals, will impact gross margins of automakers like MSIL, says HDFC Securities.
A fall in domestic sales amid weak demand is set to weigh on Maruti Suzuki India Ltd.'s bottom line and operating profitability in the first quarter of the current financial year.
The company will announce its earnings on Thursday. Standalone net profit is projected to fall to Rs 3,075.8 crore from Rs 3,650 crore in the year-ago period, as per analysts' consensus estimates compiled by Bloomberg.
Analysts at BofA have pointed to key risks like delay in new launches, slowdown in PV recovery, faster-than-expected shift towards EVs where Maruti Suzuki has been going slowly and a surge in metal prices. New plant startup costs should continue to weigh down on Maruti Suzuki's margin.
The April-June period is seen to be a seasonally damp quarter for automakers.
A note by HDFC Securities said higher raw material costs, especially steel and platinum group metals, will impact gross margins of automakers like Maruti Suzuki. While Ebitda margin is to get impacted further on operating deleverage as volumes declined seasonally.
Maruti Suzuki Q1 FY26 Estimates (Standalone, YoY)
Revenue expected to rise 2.4% to Rs 36,371 crore versus Rs 35,531 crore.
Ebitda to decline to Rs 3,798.5 crore from Rs 4,502 crore
Margin to contract to 10.4% from 12.7%
Net profit to fall to Rs 3,075.8 crore from Rs 3,650 crore.
Q1 Business Recap
Maruti Suzuki reported a sluggish 1% year-on-year rise in its vehicle sales during the quarter ended June 30. The company sold 5.28 lakh units of vehicles in the first quarter of fiscal 2026 as compared to 5.22 lakh units sold in the same period last year.
While exports surged 37%, this growth was offset by a 4.5% decline in domestic sales, which stood at 4.3 lakh units during the June quarter as against 4.51 lakh units in the year-ago period.
In an earnings call in April, Maruti Suzuki executives flagged weak demand in the economy, pointing out that 88% of the country is not participating in the car growth story as shown by poor growth in the entry-level cars segment.
The management had highlighted the comfort on the exports front, which is seen to rise in a healthy manner in the medium term.
Shares of Maruti Suzuki closed 1.2% higher at Rs 12,618 apiece on the National Stock Exchange on Wednesday, compared to a 0.14% rise in the benchmark Nifty. The stock has fallen 2% in the last 12 months and risen 16% on a year-to-date basis.
