Maruti Suzuki Reports 26% Drop in Q2 Profit Despite Record Sales
In its latest quarterly report, Maruti Suzuki India Ltd reveals a significant profit decline alongside impressive revenue growth.
Net profit fell 26.4% to Rs 2,466.1 crore in Q2 FY27.
Record sales volume reached 6,96,654 vehicles, a 26.5% increase year-on-year.
Operating profit dropped 17.1% due to rising commodity costs linked to geopolitical tensions.
Maruti Suzuki India Ltd announced a 26.4% decrease in its consolidated net profit for the second quarter of fiscal year 2027, amounting to Rs 2,466.1 crore. This decline occurred despite a robust 26% increase in revenue from operations, which totaled Rs 53,355.5 crore. The company attributed the profit drop to escalating commodity costs influenced by the ongoing conflict in West Asia and mark-to-market losses on surplus investments.
The company reported record sales volumes during this quarter, achieving the highest quarterly sales of 6,96,654 vehicles, reflecting a 26.5% rise compared to the same period last year. However, the operating profit (EBIT) fell by 17.1% year-on-year to Rs 2,803.7 crore, although it showed a sequential increase of 10.8% from the previous quarter. Maruti Suzuki's domestic passenger vehicle market share increased by 2.2 percentage points to 40.8% as demand for small cars and SUVs surged significantly.
In terms of production, Maruti Suzuki's recent capacity expansions allowed the company to meet heightened demand, yet supply still lagged behind, resulting in low network inventory of approximately 17 days. The company reported around 2 lakh pending bookings at the end of September, indicating strong consumer interest. Despite these challenges, the domestic market for passenger vehicles has shown broad-based growth, with small car sales up by 35.9% and SUV sales soaring by 68.2%.
Internationally, Maruti Suzuki's exports saw a slight decline, with 1,08,119 vehicles shipped compared to 1,10,487 in the same quarter last year, attributed to difficult geopolitical conditions. The company's shares rose by 1.6% to Rs 11,450 prior to the earnings announcement, reflecting investor optimism.
Looking ahead, Maruti Suzuki's performance in the first half of FY27 was notable, with record sales volumes of 13,79,378 vehicles, a 27.9% increase year-on-year. The company aims to navigate the challenges posed by rising costs and geopolitical tensions while maintaining its growth trajectory in the domestic market. Investors and analysts will be closely monitoring the company's strategies in the coming quarters to sustain profitability amidst fluctuating market conditions.
