Country’s largest passenger vehicle manufacturer, Maruti Suzuki India Ltd. (MSIL), reported a 4% year-on-year (YoY) increase in net profit at Rs 3,794 crore for the third quarter of FY26, compared with Rs 3,659 crore in the corresponding quarter last year. The performance, however, fell short of the Bloomberg estimate of Rs 4,416 crore.
The reported profit includes a one-time exceptional charge of Rs 593.9 crore related to the implementation of new labour codes that came into effect last year.
Revenue from operations rose sharply by around 29% YoY to Rs 49,891.5 crore in Q3 FY26, up from Rs 38,752.3 crore in the year-ago period. This, too, was marginally below the Bloomberg estimate of Rs 50,474 crore.
Maruti Suzuki said operating margins during the quarter were weighed down by cost pressures from commodity inflation. In addition, constraints related to rare earth materials compelled the company to import larger sub-assemblies instead of magnets, leading to higher costs.
Record Domestic Sales
The company said the recently implemented GST reform led to a sharp recovery in the Indian passenger vehicle market, driven largely by the small car segment. It reported its highest-ever quarterly domestic sales of 564,669 units, compared with 466,993 units in Q3 FY25—an increase of 97,676 units.
Of the incremental domestic volumes, the small car segment in the 18% GST bracket accounted for 68,328 units. Total sales during the quarter stood at a record 667,769 units, including exports of 103,100 units.
Exports increased by 3,880 units to 103,100 units in Q3 FY26 from 99,220 units a year earlier. The company has also begun exporting its first electric vehicle, the e Vitara, to Europe and is set to launch the electric SUV in the domestic market soon.
Accelerated Capacity Expansion
In response to the demand uptick following the GST reform, Maruti Suzuki has accelerated its capacity expansion plans. The company said its second plant at Kharkhoda is expected to become operational by April 2026, while a fourth production line at its Gujarat facility will come on stream shortly thereafter.
Each of these facilities will add around 2.5 lakh units of annual capacity. Plans for a second greenfield plant in Gujarat are also underway.
While near-term demand remains strong, management said it remains cautious on the sustainability of growth beyond the current surge and will undertake a detailed review of demand trends for FY27 in the coming months.