Maruti Suzuki India Ltd Q2 FY2026 Concall Summary

Key Takeaways

• GST cut unlocked a demand surge, but the quarter itself was soft: Domestic volume fell 5.1% YoY as buyers deferred purchases ahead of the 22 September GST reduction; the subsequent festive retail explosion sets up a stronger H2.
• Exports are running well ahead of plan: Export volume jumped 42.2% YoY, with first-half shipments already past 200,000 units, putting the full-year guidance of 400,000 comfortably within reach.
• Margin inched up sequentially despite headwinds: EBIT margin improved to 8.5% (from 8.3% QoQ) on operating leverage and lower opex, even as sales promotion and commodity/FX costs turned adverse.
• A 50% market share and 10% EBIT margin target is now public: Suzuki Motor Corporation’s mid-term plan, adopted by Maruti’s management as a “guiding light,” anchors the long-term story around eight new SUVs, small-car recovery, and the EV launch.
• What to watch next quarter: Whether the festive retail momentum sustains into normalised demand, the pace of inventory rebuild from very low levels, and any colour on the first of the eight promised SUVs.

The GST-Led Demand Shock

• Pre-GST paralysis: Domestic wholesales were hit hard from mid-August to 22 September as customers held off purchases in anticipation of the GST rate reduction, pulling the quarter’s volume down 5.1% YoY.
• Post-GST explosion: From 22 September, retail sales took off steeply; festive-period retail is projected at 400,000 units versus 211,000 last year, with bookings in the top-100 cities up 50% and beyond the top-100 up 65%.
• Entry-level revival: The share of the four entry-level models in the booking mix rose from 16.5% to 20.5% after the GST cut, with anecdotal evidence of many first-time buyers walking into showrooms.
• Sustainability is unproven: Management cautioned that the surge contains both deferred sales and festive euphoria, and a clear assessment of the sustainable run-rate is still pending.

Rahul Bharti: “We have to be conscious that this would have had some amount of deferred sales, some amount of festive euphoria also. So, how much of it is sustainable, we are yet to make a clear assessment.”

Margin Walk & Profitability

• Sequential EBIT bridge: Operating leverage contributed +110 bps and lower operating expenses added +50 bps; these were partially offset by higher sales promotion (-75 bps), price correction (-20 bps), VICTORIS launch advertising (-15 bps), and adverse forex/commodities (-30 bps), lifting EBIT margin to 8.5% from 8.3% QoQ.
• Gross margin decoupled from ASP: ASP grew 5% sequentially on strong exports, post-GST offtake and healthy CNG contribution, yet gross margin contracted because margin is a function of multiple factors (commodities, forex, capacity utilisation), not mix alone.
• Non-operating drag: Hardening bond yields caused an unfavourable mark-to-market on the invested surplus, pulling down non-operating income.
• Depreciation step-up: The increase came primarily from the Kharkhoda plant and dies/moulds for the VICTORIS launch.
• Long-term margin ambition: Suzuki Motor Corporation’s mid-term plan sets a 10% EBIT margin aspiration by FY 2030-31; Maruti’s management has adopted it as a guiding light and called its public disclosure a bold step.

Rahul Bharti: “This 10% EBIT margin we have also adopted as a guiding light and management is working for it. It’s on the website and personally I believe it’s a bold step to give out this number in the public domain but then it exists and this is what management is working towards.”

Product Pipeline & Market Share

• Eight new SUVs by FY31: Suzuki’s global president announced at the Japan Mobility Show that eight more SUVs will be launched in India by FY 2030-31, a number that excludes the just-launched VICTORIS.
• VICTORIS off to a strong start: The all-new flagship SUV, equipped with Level 2 ADAS, 5-star Bharat-NCAP rating, S-CNG with underbody tank, and ALLGRIP Select, had over 30,000 gross bookings by end-October.
• Model count expansion: Over the next 5–6 years, the plan is to take the portfolio closer to 28 models from roughly 19 today; most new launches are likely to be SUVs, but small-car launches could also happen in tandem.
• 50% market share target: Management believes the target is important and achievable, with levers including the eight SUVs, small-car recovery, brand strength, service network proximity, Nexa/Arena channels, the e VITARA EV launch, and a multi-pathway carbon-neutrality approach, though the global president noted it will be more difficult than ever.

Rahul Bharti: “We were in the Japan Mobility Show yesterday and Global President of Suzuki Motor Corporation, Mr. T. Suzuki, made a mention of eight more SUVs to be launched in India by the turn of the decade, by FY 2030-31. And analysts know it more than anybody else, the mathematical phenomenon. It will help our market share.”

Exports & Electrification

• Export volume surged 42.2% YoY, with first-half shipments exceeding 200,000 units; management expects to exceed the full-year guidance of 400,000 units.
• e VITARA BEV production commenced: Maruti’s first battery electric vehicle entered production, with exports having started at end-August; the vehicle is destined for sale in over 100 countries including Europe and Japan.
• Battery manufacturing milestone: Suzuki’s first lithium-ion battery, cell and electrode manufacturing facility in India for strong hybrid EVs was inaugurated alongside the e VITARA production start.
• Fronx and Jimny 5-door export milestones: Fronx became the fastest SUV from India to clock 100,000 export units; Jimny 5-door surpassed cumulative exports of 1 lakh units, manufactured exclusively in India and exported to over 100 countries.

Segments & Inventory

• Sedan segment outperformed: The 4th-generation DZIRE contributed significantly, and for the first time in a long while, sedan category growth outpaced SUV growth at the industry level.
• Small-car commitment reaffirmed: Management stated that as market leader it cannot ignore any segment, and the company will provide whatever the small-car segment needs, though no timeline or product specifics were offered.
• Inventory drawn down: Network inventory stood at about 38 days at September-end and is expected to be much lower by end-October; production colleagues worked three Sundays and likely need at least one more, with several models on a small wait list.
• CNG contribution healthy: CNG mix was described as higher than in the past, though no specific percentage was disclosed.

Rahul Bharti: “As a market leader, we cannot ignore any segment. So, it’s on our radar and we will keep studying that. Whatever that segment needs, we will provide.”

Guidance & Commitments

Key Metrics