Maruti Suzuki, Hyundai Motor India report sharp profit declines as rising costs hit Q2 margins

The country’s top carmakers, Maruti Suzuki India (MSIL) and Hyundai Motor India, reported a decline in their net profits and weak operational performance in the second quarter of the current financial year (Q2 FY27), as rising raw material costs hit margins.

Maruti Suzuki, the country’s largest carmaker, reported a net profit of ₹2,415 crore in the July-September quarter, marking a decline of 27% from ₹3,303 crore in the same period last year. Hyundai’s net profit dropped 24% to ₹1,189 crore from ₹1,570 crore a year earlier.

Both companies recorded a sharp increase in raw material costs, with Maruti Suzuki’s cost of material consumed rising 48% to ₹37,488 crore and Hyundai’s jumping 29% to ₹15,731 crore.

Operationally, both companies reported weak numbers. Maruti Suzuki’s earnings before interest, taxes, depreciation and amortisation (EBITDA) declined 6.3% to ₹4,763 crore, and its EBITDA margin contracted by 310 basis points to 8.93%.

Hyundai’s EBITDA dropped 24% to ₹1,578 crore, and its EBITDA margin contracted by 450 basis points to 7.95%.

Maruti Suzuki said its EBIT in the quarter stood at ₹2,803.7 crore, compared with ₹3,382 crore in Q2 FY26, owing to commodity price increases linked to the West Asia conflict.

Adverse foreign exchange movements and lower non-operating income due to mark-to-market losses on invested surplus also negatively impacted Maruti Suzuki’s earnings in the September quarter.

Hyundai Motor India said commodity headwinds weighed on profitability. However, operating leverage, a healthy product mix and cost-reduction initiatives helped improve its EBITDA margin sequentially.

What global investment firms said on Q2 earnings

Nomura said Hyundai’s Q2 FY27 margins were in line with consensus and that the new model cycle would drive double-digit volume growth over the next two years.

Hyundai’s current valuation of 17 times FY29 earnings per share (EPS) is attractive, given an EPS compound annual growth rate (CAGR) of 31% over FY27–FY29F, with the potential for mid-teens earnings growth beyond FY29, Nomura noted.

Morgan Stanley said that it expects a sharp recovery in margins, volumes and market share in the second half of the current financial year (H2 FY27).

Jefferies said Hyundai’s EBITDA and net profit missed estimates. Its market share slipped to 12% amid intensifying competition in the SUV segment.

CLSA said Maruti Suzuki’s EBITDA margin came in at 8.9%, ahead of consensus, supported by cost-reduction measures, price hikes and a gap between retail sales and wholesale dispatches.

With inventory below normal at just 17 days and a strong order book of 2,70,000 units at the end of Dussehra, Maruti Suzuki remains confident of delivering its 10% domestic volume growth guidance for the second half, CLSA added.

HSBC said demand commentary remains strong, with Maruti Suzuki guiding for 10% domestic wholesale volume growth in the second half.

Margin recovery may be gradual, as price hikes are cautious and improvement depends on commodity prices cooling off, HSBC noted.

Nomura said Maruti Suzuki gave strong guidance for the second half, but the risk of a slowdown remains in FY28.

Goldman Sachs said the second quarter was in line with expectations, but the margin outlook remains volatile.

Maruti Suzuki is not looking to make short-term pricing decisions and would prefer to take a longer-term view of how it can support structurally faster car demand growth in India. Management expects to launch a new EV at the Bharat Mobility Global Expo in February 2027, Goldman Sachs added.