M&M Vs Maruti:  SUVs or a bet on small cars – 6 key factors driving India’s auto giants 

The contrast became sharper during management commentary. Maruti spoke repeatedly about affordability, entry-level recovery and production constraints, while Mahindra & Mahindra focused on margin expansion, AI-led execution, export growth and capital allocation discipline.Together, the results offered one of the clearest pictures yet of how India’s passenger vehicle market is splitting between mass recovery and premium dominance.

Maruti Vs M&M Q4FY26: Volume growth came from two completely different markets

Maruti Suzuki’s FY26 performance was driven by a recovery in small cars after the GST reduction in the second half of the year. The company recorded its highest-ever annual sales of 24.22 lakh vehicles in FY2025-26, rising from 22.34 lakh vehicles in FY2024-25. Domestic sales increased to 19.74 lakh units from 19.01 lakh units, while exports jumped to 4.47 lakh units from 3.32 lakh units during the same period. The company also reported its highest-ever quarterly sales at 6.76 lakh units in Q4 FY26, up from 6.04 lakh units in Q4 FY25.

Rahul Bharti, Chief Investor Relations Officer at Maruti Suzuki India, said during the earnings call, However, in the second-half of the year led by the government’s GST reform, the industry witnessed a sharp turnaround with the passenger vehicle market growing by a whopping 16.7% year-on-year.” 

Bharti further said, “As of the end of the fiscal year, around 190,000 customer orders remained unserved and we are trying to service them fast, highlighting the strength of the underlying demand. Importantly, near 130,000 of these pending orders were in the small car segment.”

Mahindra’s growth trajectory came from a completely different side of the market. The company strengthened its position in SUVs and tractors, with consolidated FY26 revenue rising to Rs 1.99 lakh crore from Rs 1.59 lakh crore in FY25, while consolidated PAT increased to Rs 17,099 crore from Rs 12,929 crore. Auto segment volumes increased 19% year-on-year in FY26, while SUV volumes increased 20%. Tractor volumes rose 24% during the year.

Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector at Mahindra & Mahindra, said, “In Q4FY26, the SUV Revenue share increased by 60 bps YoY, retaining the No 1 position. M&M is now the 5th largest exporter for PV + CV in F26. Tractors gained 90 bps in Q4 YoY, with a full year market share of 43.6%, gaining 30 bps.”

Maruti Vs M&M Q4FY26: Margin expansion favoured one, while other battled commodity costs

Maruti Suzuki reported Q4 FY26 EBIT of Rs 4,409 crore, rising 30.4% from Rs 3,381 crore in Q4 FY25. However, net profit declined to Rs 3,590 crore from Rs 3,857 crore during the same period due to mark-to-market losses linked to higher bond yields. EBIT margin improved marginally to 8.8% in Q4 FY26 from 8.7% in Q4 FY25. Material cost as a percentage of net sales increased to 76.7% from 74.3%, indicating continued commodity pressure.

Bharti said, “Margins of course, some prices like commodity, energy, gas prices do go up in such times which is possible to understand, but we’ve been seeing commodity changes in the past also. And we also believe that once the West Asia crisis is over, many of these cost pressures would return, would lapse.” He also said, “A lot of mitigation actions are in progress. In fact, management spends a lot of time on this.”

Mahindra delivered visibly stronger margin expansion. Its standalone auto business reported Q4 FY26 PBIT margin of 9.5%, while excluding eSUV contract manufacturing, margins stood at 10.9%, up 80 basis points year-on-year. Farm segment standalone Q4 PBIT margin stood at 19.4%, while FY26 farm segment margin expanded 150 basis points to 19.9%.

Anish Shah, Group CEO and Managing Director at Mahindra & Mahindra, said during the analyst interaction, “Very strong performance from both Auto and Farm, both in terms of volume and margins. Auto volume up 19%, margin up 80 basis points. Yes, Farm was dragged down by the international subsidiaries, and we exited 3 of them, so the impairments for that is what reflects in the 13% number that I mentioned for Farm with regard to profit after tax growth.”

The difference in profitability trends became one of the sharpest contrasts between the two companies. Maruti continued to operate with thinner margins despite scale leadership, while Mahindra’s premium SUV mix and farm business delivered stronger operating leverage.

Maruti vs M&M Q4FY26: Dividend payouts Maruti Suzuki recommended its highest-ever dividend of Rs 140 per share for FY26, up from Rs 135 per share in FY25. The payout came after the company reported a record annual net profit of Rs 14,445 crore, up marginally from Rs 14,297 crore in FY25. Revenue for FY26 increased to Rs 1.74 lakh crore from Rs 1.45 lakh crore.

Bharti told analysts, “ The board of directors recommended its highest ever dividend of Rs 140 per share.”.

Mahindra declared a dividend of Rs 33 per share for FY26, marking a 30% increase over the previous year. Amarjyoti Barua, Group Chief Financial Officer at Mahindra & Mahindra, said, “Strong cash generation during the year has reinforced our balance sheet, providing flexibility to fund future growth initiatives in line with our strategic priorities. Reflecting this performance and our continued focus on long-term value creation, we are pleased to announce a dividend increase of 30%.”

The difference in payout structures also reflected different investment cycles. Maruti continued to commit aggressively toward manufacturing capacity, EV charging infrastructure and exports. Mahindra, meanwhile, balanced payouts with investments across SUVs, AI infrastructure, financial services and new-age businesses.

Maruti vs M&M Q4FY26: Capacity expansion and EV bets took centre stageMaruti Suzuki’s management commentary carried repeated references to production bottlenecks and future capacity creation. The company commissioned the second plant at the Kharkhoda facility in April 2026 and plans to operationalise the fourth production line at Hansalpur during FY27. Each facility adds annual capacity of 2.5 lakh vehicles. The company also reiterated plans to increase total production capacity to 40 lakh units annually in the medium term.

Bharti said, “Increasing production capacity by about half a million units in a single year is virtually unheard of in the passenger vehicle industry.” He also said, “This bold move is a clear testament to our unwavering confidence and optimism in the immense growth potential that lies ahead.”

Maruti also pushed ahead with electric mobility through the e-Vitara. 

Bharti said, “The E-Vitara represents Maruti Suzuki’s first fully electric SUV developed on a fresh dedicated platform and designed for Indian and about 100 global markets.” The company said exports of the e-Vitara already reached 44 countries.

Mahindra’s guidance focused more heavily on resilience, technology and exports. The company laid out supply-chain mitigation plans covering more than Rs 1 lakh crore of purchases and over 40 commodities. It identified 82 high-risk part families and nine high-risk commodities while detailing inventory buffers, localisation and alternate supplier development.

Shah said, “We don’t expect uncertainty to go away, but we are best positioned to take advantage of uncertainty.” He added, “Our businesses are well-positioned to continue on their growth trajectory.”

Mahindra also spent considerable time discussing AI-led productivity initiatives across auto, finance and manufacturing operations. The group expects AI adoption to contribute meaningfully to revenue growth, customer experience and cost reduction over the next few years.

Maruti vs M&M Q4FY26: Exports emerged as a common growth lever

Exports became an increasingly important earnings driver for both companies during FY26. Maruti Suzuki exported 4.47 lakh vehicles during FY26, up from 3.32 lakh vehicles in FY25, accounting for 49% of India’s passenger vehicle exports. The company described itself as the country’s leading passenger vehicle exporter for the year.

Bharti said, “Investors will be very happy to note that your company, just one company, among 18 car manufacturers in India alone contributed 49% share of India’s total passenger vehicle exports in the financial year.”

Mahindra also strengthened its export positioning. Jejurikar said, “M&M is now the 5th largest exporter for PV + CV in F26.” The company linked future export opportunities to India’s free-trade agreements and manufacturing competitiveness.

Shah said, “For auto, it was more about FTAs encouraging foreign makers to make in India as well, not just shut plants in India and send everything from outside. We think the government did a very nice job at balancing that.” He also said, “The opportunity for us to be able to export to the U.K., to E.U., to many other countries around the world, and that’s a huge opportunity that we have.”

While Maruti’s exports continued to be scale-driven and mass-market oriented, Mahindra increasingly positioned exports around SUVs, commercial vehicles and global manufacturing competitiveness.

Maruti Vs M&M: Brokerage views

JM Financial maintained a ‘Buy’ rating on Maruti Suzuki with a target price of Rs 16,570 and upside potential of 28.5%. The brokerage said Maruti’s pending order book of 1.9 lakh vehicles, low dealer inventory of 12 days and strong exports could support growth in FY27. It also expects EBITDA margin to improve to 11.6% in FY27E and 12.5% in FY28E. 

Axis Securities retained a ‘Buy’ rating on Maruti Suzuki with a target price of Rs 14,620 and upside potential of 13%, saying the GST cut on small cars helped revive entry-level demand and increased the share of first-time buyers to 51% in Q4 FY26 from 42% in H1 FY26. 

The brokerage expects steady growth in revenue, operating profit and earnings over FY26-28. Motilal Oswal also reiterated a ‘Buy’ rating on Maruti Suzuki with a target price of Rs 15,529 and upside potential of 20%. The brokerage said Maruti’s capacity expansion and improving demand for small cars could help the company regain market share over the next two years.

On Mahindra & Mahindra, JM Financial maintained a ‘Buy’ rating with a target price of Rs 3,800 and upside potential of 18.3%. 

The brokerage said Mahindra’s SUV launches, tractor demand and stable margins could support earnings growth over the next two years despite higher raw material costs. It expects EBITDA margin at 13.9% in FY27E. 

Motilal Oswal reiterated a ‘Buy’ rating on Mahindra & Mahindra with a target price of Rs 3,963 and upside potential of 23%. The brokerage pointed to Q4 FY26 revenue growth of 26% year-on-year to Rs 39,554 crore and adjusted profit growth of 53% to Rs 3,737 crore, supported by strong SUV sales and healthy tractor margins.

Conclusion

Maruti Suzuki and Mahindra & Mahindra entered FY27 from very different positions within the same auto market. Maruti’s earnings showed a strong recovery in small cars after the GST reduction, with rising first-time buyers, record pending orders and aggressive capacity expansion pointing to demand returning at the mass-market end. Mahindra, meanwhile, continued to benefit from premium SUVs, tractors and stronger margins, with profitability growth remaining ahead despite commodity pressure.Disclaimer: Financial analysis and brokerage ratings provided above are for informational purposes only and do not constitute an offer, solicitation, or specific investment advice to buy, sell, or hold any securities. Given the inclusion of price targets and market predictions, readers are strongly advised to consult a SEBI-registered investment advisor before making any financial decisions based on this data. Markets remain subject to volatility, and past corporate performance or dividend payouts do not guarantee future returns.

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