Maruti Suzuki Q4 review: Margin recovery to demand momentum; what analysts predict for FY27

In its Q4 results, Maruti Suzuki’s consolidated quarterly net profits dropped 7% to ₹3,590 crore in the March quarter, compared year-on-year with ₹3,911 crore in the same period a year ago. However, the automaker’s full-year PAT rose 1.24% to ₹14,679 crore, fueled by the central government’s GST cuts.

Analysts said that although the company’s stock has corrected nearly 20% so far in 2026, the domestic demand, paired with the volume growth, is offsetting Maruti Suzuki’s cost pressure from the West Asia crisis impact.

Is there margin recovery ahead?

The financial report showed that although Maruti Suzuki’s operational performance remained stable in the March quarter, the profit margin in terms of Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) dropped by 10 basis points to 11.74%.

Although Maruti Suzuki’s EBITDA margins dropped in the quarter, the operational EBITDA increased 27% to ₹6,157 crore in Q4 FY2025-26, compared to ₹4,842 crore in the same period a year earlier, as per the data.

Analysts from Morgan Stanley expect that the company’s margins are likely to ‘bottom out’ in the April to June quarter of the financial year ending 2026-27, after which it is expected to recover its levels.

“Margins likely to bottom out in Q1FY27, followed by recovery. Operating leverage, lower discounts and richer mix to support margins,” said the analysts. The experts also said that the company’s stock has taken a hit over the margin contraction concerns in the market.

Experts ahead of Q4 results predicted that if the supply chain disruption continues for long, keeping the prices of industrial commodities higher, then it is likely to affect the company's margins over time.

Price hike to aid EPS growth?

Maruti Suzuki’s earnings per share (EPS) witnessed a contraction to ₹116.38 per share in the fourth quarter, compared to ₹124.40 in the same period a year ago, as per the consolidated financial statements. On annual basis, the EPS witnessed a rise to ₹466.90, from ₹461.20 a year ago.

As investors worry about the EPS growth, Goldman Sachs analysts highlighted that if the company increases its prices, then the hikes are expected to aid the Maruti Suzuki’s EPS growth amid healthy demand in domestic market and exports.

“Exports outlook balanced despite Middle East logistics issues. Potential price hikes could materially aid EPS growth,” said the analysts. “Price hike optionality remains key monitorable.”

They also highlighted that the demand momentum for the company remains healthy despite the geopolitical concerns. However, in case of the high demand model offerings, the supply constraints persist in the market.

What’s next for Maruti Suzuki?

With Maruti Suzuki’s net sales crossing ₹50,000 crore, and the company recording its highest-ever total quarterly sales of 6,76,209 units in the fourth quarter of the financial year ended 2025-26, the high demand momentum is set to fuel the sales figures.

The company has also allocated ₹14,000 crore in capital expenditure (capex) for the financial year ending 2026-27, as it plans to meet the rising demand. Maruti Suzuki also has plans to set up additional capacity for 2,50,000 vehicles on top of the existing 24 lakh units per year spread across plants in India.

Maruti Suzuki’s exports reaching an all-time high of 1,37,215 units, the market now expects the outlook for the company to depend on the end-market demand amid the dynamic developments in the US-Iran conflict.

“After having 30%+ export growth in FY26, the outlook remains contingent on end-market demand now given the ongoing conflict,” said analysts from UBS in a recent note.

UBS analysts also highlighted that the company’s dealer inventories remained at a low of around 12 days of stock in hand. Investors also need to watch out for the inventory levels of the dealers, as experts have flagged earlier that if the existing low-cost inventory is replaced with high-cost inventory, it will further impact the cost to the company.

Shares of Maruti Suzuki were trading 4.55% higher at ₹13,467 as of 11:26 am, with markets reacting to the Q4 earnings, compared to ₹12,892 at the previous market close, according to NSE data.