Maruti Suzuki Q2 FY26 Results: Exports drive growth as GST impact might have slowed domestic demand

Maruti Suzuki India Limited reported a mixed set of numbers for the quarter ended September 2025, with strong export performance cushioning a soft domestic market. The company’s second-quarter results reflect a period of transition for India’s automobile industry, as many buyers deferred purchases following the implementation of the new GST regime on 22 September 2025. Maruti Suzuki’s share closed flat today.

Revenue Rises, Margins Under Pressure

Maruti delivered steady topline growth in Q2 FY’26, even as profitability declined due to rising costs and foreign exchange pressure.

• Net Sales: ₹40,135.9 crore, up 12.8% year-on-year
• Operating Profit (EBIT): ₹3,394.9 crore, down 7.4%
• Profit After Tax (PAT): ₹3,293.1 crore, up 7.3%

Operating margins slipped from 10.3% to 8.5% as material costs and promotional expenses rose. Material cost as a share of sales increased to 76.5% (from 74.9% last year), reflecting cost inflation and an unfavourable currency movement.

Domestic Sales Decline, Exports Surge

Maruti sold a total of 5,50,874 vehicles, up 1.7% from a year earlier. However, this modest growth came entirely from exports.

• Domestic sales: 4,40,387 units, down 5.1% year-on-year
• Exports: 1,10,487 units, up 42.2% year-on-year

Domestic weakness was led by declines in the entry-level and UV categories. Mini car sales fell 32.6%, UVs dropped 13.9%, while the compact segment grew 8.4%, cushioning the overall fall.

Exports remained the highlight, accounting for 20% of total volumes, up from 14% last year, driven by strong demand from overseas markets in Africa and Latin America.

GST Timing Impact

The implementation of the new GST framework on 22 September 2025 likely caused many buyers to delay vehicle purchases, awaiting post-GST pricing and compliance clarity. As a result, the company’s September-end sales were softer, temporarily weighing on domestic volumes.

Analysts expect a rebound in Q3 as deferred purchases convert into sales, supported by the festive season and early signs of improved rural sentiment.

Sequential Trends and Cost Drivers (Q2 FY’26 vs Q1 FY’26)

Compared to the April-June 2025 quarter, Maruti saw higher volumes and revenue but lower profitability, reflecting cost and margin pressures.

• Net Sales: ₹40,135.9 crore, up 9.6% from ₹36,624.7 crore
• Operating Profit: ₹3,394.9 crore, up 11% from ₹3,057.8 crore
• Profit After Tax: ₹3,293.1 crore, down 11.3% from ₹3,711.7 crore

The company attributed margin softness to higher ad spends, model-specific price corrections, and initial costs linked to the new Kharkhoda greenfield plant. However, cost-reduction initiatives and lower operating expenses provided some relief.

Outlook: Short-Term Pause, Long-Term Capacity Play

The September quarter was weighed down by temporary factors, GST timing, cost inflation, and new plant expenses, but Maruti’s fundamentals remain strong. Deferred purchases are likely to lift Q3 volumes, while exports continue to offer stability.

With capacity expansion at Kharkhoda and consistent cost optimisation, Maruti is well-placed for a recovery-led second half of FY '26. The company’s growing export share also helps offset domestic volatility, positioning it strongly in both Indian and global markets.

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