Dividend Drives On, but Margins Stall: Maruti’s Q4 Results Rattle Markets

Image Source: Value Research

Maruti Suzuki, the largest carmaker in India, ran into a pothole in its Q4 numbers, lagging behind analyst estimates on profit and margins, and leading brokerages to reduce target prices following a guarded view for FY26.

Key Highlights:

Profit and Margin Miss: Maruti Suzuki’s standalone net profit for Q4 FY25 fell 4.3% year-on-year to ₹3,711 crore, below analyst estimates. EBITDA dropped 9% to ₹4,264 crore, with margins shrinking to 10.5% from 12.3% last year, reflecting higher input costs and increased spending on promotions and advertising.
Revenue Growth, But at What Cost: Revenue increased 6.4% to ₹40,674 crore on the back of price increases and highest-ever sales volumes. It sold 604,635 units in the period, its highest ever, with domestic sales increasing 2.8% and exports climbing 8.1%.
Dull Domestic Demand: Management raised alarm over lackluster domestic demand and affordability issues, particularly in the small car space. Maruti Suzuki cautioned that FY26 might not witness meaningful improvement, with industry growth expected at a lackluster 1–2%.
Brokerages Become Guarded: Various brokerages lowered their target prices, attributing this to the margin miss and the firm's conservative guidance on future demand. Input cost inflation and a tough product mix are to continue putting profitability under stress.
Dividend and Export Strength: Despite the challenges, Maruti Suzuki declared a final dividend of ₹135 per share and maintained its position as India’s top passenger vehicle exporter for the fourth consecutive year, contributing 43% of total exports.

Maruti Suzuki’s Q4 performance highlights the balancing act between growth and profitability, with the road ahead clouded by domestic market uncertainty and rising costs.

Sources: Moneycontrol, CNBC-TV18, Economic Times