The country’s largest passenger car manufacturer, Maruti Suzuki India, missed analyst estimates for the January-March quarter earnings on all fronts on Friday and struck a cautious note on the outlook for FY26, signalling continued pressure in the domestic passenger vehicle market.
At a post-earnings conference, Maruti Suzuki chairman RC Bhargava said that demand in FY26 is likely to remain subdued due to persistent affordability constraints among consumers. “The local market has been soft and growth was extremely limited,” he said.
He said broader industry forecasts from the Society of Indian Automobile Manufacturers (Siam) point to just 1-2% growth in the current financial year. The income tax relief announced in the Budget would not be enough to revive small car sales, as only 12% households with an annual income above Rs 12 lakh currently have the financial capability to purchase a vehicle, Bhargava said. “People can’t afford small cars because they have become unaffordable due to the high cost of implementing regulatory measures,” he said.
Bhargava said that high growth cannot be expected when 88% of the country’s households earn below the threshold needed to afford cars costing Rs 10 lakh and above.
Despite challenges at home, Maruti expressed cautious optimism about its export strategy, stating that overseas markets will contribute 20% of its total sales in FY26, up from 18% in the previous year. The company clarified that it does not export to the US and is, therefore, insulated from macroeconomic headwinds affecting that region.
During the January-March quarter, Maruti’s standalone net profit fell 4.3% year-on-year to Rs 3,711 crore, missing Bloomberg consensus estimate of Rs 3,857 crore. Revenue grew 6.4% to Rs 40,674 crore against estimated Rs 40,929 crore. Ebitda declined 9% to Rs 4,265 crore, again missing estimates of Rs 4,897 crore. Margins contracted 150 basis points to 10.5%, hurt by increased promotional spending, higher discounting, and operational costs associated with the new Kharkhoda plant.
While full-year domestic sales in FY25 edged up just 2.7%, export volumes rose 17.5%, resulting in a 4.6% increase in total volume for the year. In the March quarter, sales rose 3.5% to 604,635 units, on the back of an 8.1% jump in exports to 85,089 units, while domestic sales went up by only 2.8% to 519,546 units .
To offset cost pressures, Maruti raised vehicle prices twice — in February and April — but said that raw material costs had still surged nearly 20% in the quarter. Total expenses increased 8.6% to Rs 37,330 crore.
The company declared a final dividend of Rs 135 per share for FY25.
Looking ahead, Maruti is banking on new product launches and export momentum to revive growth. It plans to introduce another SUV later this year and will make six airbags standard across its entire vehicle line-up. The company is also developing a compact hybrid car, though it did not give the exact timeline of its launch. It said that e-VITARA, which was showcased at the Auto Expo, is slated to be commercially launched in September, followed by five more electric models by 2030.
