Ladies and gentlemen, good day and welcome to Maruti Suzuki India Limited Q2 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Ambaprasad. Thank you, and over to you, sir.
Thank you, Rutuja. Ladies and gentlemen, good evening once again. Welcome you all to the Q2 FY 2026 earnings call. May I introduce you to the management team from Maruti Suzuki ? Today, we have with us our Chief Investor Relations Officer, Mr. Rahul Bharti, and CFO, Mr. Arnab Roy. Before we begin, may I remind you of the safe harbor? We may be making some forward-looking statements that have to be understood in conjunction with the uncertainty and the risks that the company faces. I also like to inform you that the call is being recorded, and the audio recording and the transcript will be available at our website. May you please note that in case of any inadvertent error during this live audio call, the transcript will be provided with the corrected information.
The con call will begin with a brief statement on the performance and outlook of our business by CIRO and Senior Executive Officer, Corporate Affairs, Mr. Rahul Bharti, after which we'll be happy to receive your questions. I would now like to invite our CIRO, Mr. Rahul Bharti. Over to you, sir.
Thanks, Pranav. Good evening, ladies and gentlemen, and thank you for joining us. Before we move on to the financial results, I believe it is only appropriate to begin by expressing our heartfelt gratitude to the Honorable PM, the Honorable FM, and the GST Council for ushering in a landmark reform which has brought buoyancy not just to cars but to the overall consumption sentiment in India. Because of that, there is a high level of consumer activity in our showrooms, and we hope the momentum continues. We also have had other major milestones to report in this quarter. We are deeply honored that the Honorable Prime Minister graced the occasion of two historic events for the Indian automobile industry. The first was the start of production of Maruti Suzuki 's first BEV, the e VITARA, for sales in over 100 countries, further expanding our multipathway approach to carbon neutrality.
I must say, at a time when most conversations about electric vehicles in India are around imports from technologically advanced countries, it is the responsibility of the market leader to bring a paradigm shift and produce a state-of-the-art BEV, the e VITARA, both for the Indian market and for export to over 100 markets of the world, including Europe and Japan. The second was Suzuki 's first lithium-ion battery cell and electrode-level manufacturing in India for strong hybrid electric vehicles. Both of these were significant milestones in [Macon India at Bharat]. Back home, there have been more powerful milestones. The launch of the Victoris further strengthened the company's product portfolio in the high-growth SUV segment.
The all-new Maruti Suzuki Victoris is equipped with new-age features to offer a got-it-all experience, with features like theater-on-wheels effect, a Smartplay Pro X touchscreen infotainment system with OTA updates, smart power tailgate with gesture control, all-round safety with level two ADAS, six airbags, high-definition 360-degree view camera, five-star safety rating in Bharat NCAP for both adult and child occupant protection, next-generation Suzuki Connect telematics with e-call and 60+ features. Available in multiple options like petrol with strong hybrid, all-grip 4x4, eco-friendly smart CNG technology, with a segment-first underbody tank design. I'm happy to share that the Victoris, equipped with a host of cutting-edge technological features, has generated remarkable excitement in the market, garnering over 30,000 bookings in a very short span of time. In addition to the Victoris, another model, INVICTO, secured a five-star safety rating.
The company also celebrated 10 years of NEXA by unveiling the Grand Vitara PHANTOM BLAQ Edition with matte black exteriors and all-black interiors. Grand Vitara has set a new benchmark in the mid-SUV space by achieving 300,000 sales in just 32 months. The company also inaugurated its 5,000th Arena service touchpoint in India. In total, Maruti Suzuki's service network has over 5,640 service touchpoints, covering 2,818 cities across India. These workshops include a diverse mix of formats such as Arena and NEXA workshops, Maruti Suzuki sales and service points, rural workshops, service on wheels, and Maruti Suzuki authorized service stations. The company continued to maintain robust growth in exports. Just one out of 18 car companies in India, which is your company, Maruti Suzuki, commanded nearly 45.4% share of India's total passenger vehicle exports in quarter two of this financial year.
The FRONX became the fastest SUV from India to clock exports of 100,000 units. Another point, the Jimny 5-door has recently achieved a landmark milestone, surpassing a cumulative export figure of 100,000 units from India. The export journey for the Jimny 5-door began in 2023, shortly after its India debut. The SUV manufactured exclusively in India has won hearts across more than 100 countries, including Japan, Mexico, and Australia. Coming to the business performance in quarter two, during the quarter, the company sold a total of 550,874 units, comprising domestic sales of 440,387 units and exports of 110,487 units. The domestic sales volume declined by 5.1%, and the export volume grew by a robust 42.2%. You may be aware, in the domestic market, due to the anticipated price reduction on account of GST, there was very low sale from mid-August till September 22.
The wholesales got temporarily impacted on account of this. Interestingly, starting September 22, retail sales have taken off steeply, and the festive season sales have been exceptionally good for us. The buoyancy of GST reduction will reflect in the future quarters. Another notable development in Q2 was the strong performance of the fourth-generation Dzire, which contributed significantly to the growth of the sedan segment across the industry. For the first time in a long while, the growth in the sedan segment outpaced that of SUVs at the industry level. The major highlight in exports was the e VITARA exports. So far, the company has shipped over 7,000 units, majorly to European countries. In financial results, the company registered net sales of INR 401.3 billion as against INR 355.8 billion in the same period previous year.
The net profit for the quarter was INR 32.9 billion, compared to INR 30.6 billion in Q2 of the financial year. Since investors look for a sequential comparison, I'll share. On a sequential basis, while the overall sales volume grew by 4.4%, the net sales grew by 9.6%, owing to a favorable mix. Sequentially, the operating profit margin EBIT has increased to 8.5% of net sales, compared to 8.3% in Q1 of financial year 2026. The favorable factors were leverage of about 110 basis points, lower operating expenses of about 50 basis points. These favorable factors were partially offset by higher sales promotion expenses by about 75 basis points, a limited-time price correction in some models which affected margin by about 20 basis points, and advertisement expenses, largely on account of the new model, Victoris, higher by about 15 basis points.
Forex and commodities put together were adverse by 30 basis points, and the commodities were adverse largely on account of PGM, and forex was adverse largely on account of the Japanese yen. Additionally, it is to be noted that the benefit in terms of forex of about 20 basis points is accrued due to hedging gain, and because of the nature of this income, this benefit is accounted in non-operating income and is therefore not captured in the operating margin. I may also add, at the PBT level, the hardening of bond yields resulted in an unfavorable mark-to-market impact on our invested surplus, leading to lower non-operating income. Coming to the half-year financial results, the company sold a total of 1,078,735 units during the period, comprising domestic sales of 871,276 units and all-time high half-yearly exports of 207,459 units.
The company posted its highest-ever half-yearly net sales of about INR 767.6 billion in H1 of financial year 2025-2026, as compared to INR 694.6 billion in H1 of financial year 2024-2025. Net profit in H1 of financial year 2025-2026 was at about INR 70 billion, as against INR 67.2 billion in H1 of the previous financial year. We are now ready to take your questions, feedback, and any other observations. Thank you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raghunandhan NL from Nuwama Research. Please go ahead.
Thank you, sir, for the opportunity and festive greetings. Two questions. Firstly, how was the festive season in terms of growth? Second, what is the strategy to take back market share to 50%?
Great. In the festive season, if we talk about retail sales, and I'm talking about the period from 22nd September, which was the first day of Navratri, also the first day of GST increase, till date, we've got about 500,000 bookings. In the same period, the previous year, we were at about 350,000 bookings. If we talk about retail sales in this period, we did about 400,000 retails. The same period the previous year was 211,000 retails. Within this 400,000 retails, about 250,000 came from small cars, which had a growth of almost 100%. Having said that, we should qualify that there could be an element of deferred sales in these numbers. I missed your other question.
Is the strategy to take the market share back to 50%?
Okay. Sorry. I want to add one more piece of statistics. In the month of October, our retail grew by about 20% overall. Our growth in the—this is October retail versus previous October retail—20% growth overall, in which the small car segment, which falls under the 18% GST bracket, grew by 30%. These things are favorable, and I would imagine they would be positive for our market share also. We were in the Japan Mobility Show yesterday, and our 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 2030-2031. Analysts know it more than anybody else, the mathematical phenomenon. It will help our market share. Of course, the usual strengths. For example, the Victoris has just been launched, so those numbers will be incremental.
The eight SUVs do not include Victoris. The e VITARA numbers are also yet to come. The usual strengths of Maruti, the brand, the features, the quality, the proximity of our sales and service network, all of them will also help us. Next.
Thank you. The next question is from the line of Binay from Morgan Stanley. Please go ahead.
Hi, team. Thanks for the opportunity. Just continuing on the earlier comments you made, like the data that you shared, a large part of retail sales came from the small car side. How do you see that momentum continuing into the coming months? Secondly, how to think about gross margins, ASPs, and all in that context? You also talked about a temporary price reduction. How to think about gross margins if small car rebound continues?
Okay, I missed your first question.
How do you see the small car trend continuing?
Sustainability of this momentum.
Yeah, half the sales came from small car, yeah?
We have to be conscious that this would have had some amount of deferred sales, some amount of festive euphoria also. How much of it is sustainable, we have yet to make a clear assessment. At least, I think the total industry growth across all segments, we should see about 6% year-on-year on a sustainable basis. That is a preliminary estimate. It's very difficult to predict the future. On margins, we don't talk about segment-wise profitability. We talk about blended average, and that is the strength of a market leader who has presence in multiple segments.
Rahul, just the 6% number, like earlier we had talked about, I think 10% H2 growth in volumes. Is this 6%?
10% in small cars. We had mentioned 10% for the small car segment, and 6% overall.
In the second half for the industry, is that what you are saying, or it's about?
Second half and beyond, yes. In the month of October, the cars that were in the 18% bracket grew by 30% for Maruti retail sales. The cars that were in the 40% bracket grew by between 4%- 5%. We believe that small cars should grow faster than other countries, particularly on this base. Having said that, it's always very difficult to predict the future. We'll make an assessment maybe in January or February, what could be a sustainable level of growth going forward.
Lastly, just typically post-festive, we see production volumes dropping down. Now that October is almost behind us, your retail sales have played out. What is inventory, booking number? Are you again, are you keeping that production momentum that we saw? Any comments on the near term?
Yes, our production colleagues have worked for three Sundays now, and probably we'll need to work at least one more Sunday. Inventories would be at a low level in the network. A number of models are now on a small waitlist. We are stretching to deliver on this demand.
Great. Thanks. I'll come back in the cue .
Thank you.
Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead.
Hi. Thanks for taking my question. Just a quick clarification. Rahul, would you talk about the pending bookings post-festive and what that number is?
Sorry, your voice was not clear. The question is on pending bookings. It's about 200,000.
Okay. Got it. Two questions from my side. Firstly, continuing on the small car recovery, we'll, of course, ask about how sustainable it is.
Yeah, we are not able to hear you. Gunjan, your voice is not clear.
I'm sorry to interrupt you, Gunjan, but your voice is sounding muffled. Can you please check?
Better now?
Yes. It's good.
Oh, much better.
Okay.
Just two questions. Firstly, on the small car recovery that we are seeing right now, of course, it'll take time to ascertain the sustainability. If this was to come back, how do you think the launch cycle and the product action changes? I mean, a lot of focus incrementally is on SUVs, right? If we were to go back on the drawing board and think about smaller car coming back, how soon or what sort of changes we expect? That will be the first question. I mean, just sort of excitement we should see on that portfolio. We haven't really seen much on the non-SUV side.
We have studied the market, studied the consumer trends, and studied what we can do different on our products. It is a very, very continuous exercise between our marketing and product planning verticals. It continues all the time, particularly when the cycle of product development almost runs into four years. We are quite conscious of this. We are continuously studying that customer in that segment. As a market leader, we cannot ignore any segment. It is on our radar, and we'll keep studying that. Whatever that segment needs, we will provide.
Okay. Second question on the margin, just looking for a clarification on what did this depreciation increase come from in this quarter? Is this the sort of number we should work with? Maybe I'm just adding in a bit more on margin where Binai did ask on the margins. Just trying to get a sense, does a small car recovery mean it has an adverse implication on the profitability of the portfolio? If you can just share some qualitative insights around that.
I'll take your question, Gunjan. This is Arnab. All the depreciation is primarily coming out of the new plant, which is in Kharkhoda. That's the impact of the depreciation. As we have said multiple times, we don't give a forward-looking outlook. It's not there. In any case, the gross margin is dependent on multiple factors. It's a function of commodity, a function of forex, a function of the capacity. There are too many factors which come into play, not a single factor which you can call out.
Kharkhoda had already reflected from March and June quarter, right? I'm a little unsure of the step-up in this quarter. Was it to do with the launch or a commissioning of a line?
See, Kharkhoda is one of the factors. Plus, we had a new model launch which came out, the Victoris. There will be a direct impact of that in this quarter. We're producing the Victoris in the Kharkhoda plant.
All right. I'll join back with you. Thank you.
Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead.
Hi. Good evening, sir. We just wanted to understand, we have seen a very strong improvement in ASPs. What are the reasons for that? If you could help us understand that, any more color on the mix would be helpful.
I think the mix has been overall, I mean, we are holding on to the mix. As you can see, post-22nd, there was a good sale. Overall, if we have to talk about the ASP in quarter two FY 2025, we were at about INR 566,000 in that range. This quarter, we are in the range of INR 587,000. Last quarter, we were at about INR 576,000. Yes, I think the ASPs are going in the right direction.
Any color you can share here? Which models make for what mix has led to a QoQ improvement that you are seeing?
It's a combination of multiple things because there are multiple markets, multiple things which come in. Overall, as we have said in the walk, the overall, I think there has been a good export, as you can see here. Export has been good. I mean, post-22nd, I think generally there has been a good offtake, which has helped us. Specifically calling out a model may not be the right reason here because things play into the picture. The CNG contribution has been good. A combination of things have contributed to that.
Okay. Can you just let us know where are the inventory levels? I also missed the retail sales in festive season last year. Did you mention 211,000?
Yes, that's right. Last year, 211,000. This year, 400,000. This is for the period 22nd September till 31st October. Projected.
What are the inventory levels currently?
As of September, we were at about 38 days of inventory. As Rahul said, the October outlook, it will be much lower in October end.
Okay. Sure. Just one question I had on the pricing power now. How to think about that and the discounts? Can we see a scenario, as you are saying, inventories come down? Can the discounts fall sharply as we go ahead? You have always mentioned that discounts are a function of the inventory. Is there a need to increase prices given the cost pressures that you are seeing? What is the outlook on costs? If you could share that.
It's not easy to say this. It depends on many, many factors. We'll, of course, watch the market. We want that the market momentum should continue.
Okay, sir. Thank you. I'll come back to the cue .
Thank you. The next question is from the line of Amit Hiranandani from Philip Capital. Please go ahead.
Yeah. Thanks for the opportunity and congrats team for the decent set of numbers. Sir, my question pertains to the ex-showroom prices which Maruti has reduced for some models. Looking at the current momentum, do you think Maruti will be able to roll back prices partially? Related to this, if you can help us with the average discounts also for the quarter two, please.
We just answered this question. Pricing and discounts depend on many, many factors. It's very difficult to say. What we had done on 22nd September was we had gone beyond just GST benefits and offered from our side because we wanted to build a critical mass, and we wanted to build a consumer momentum, which fortunately has come. It will be difficult to make any kind of projection for the future. Your second question?
Sir, your retail sales have done very well. Basically, I wanted to understand what was the industry retail sales for the same period?
Sorry, retail sales?
Retail sales for the festive period was very well for Maruti . What was the industry number for the same period?
Industry, we would not have. Maybe by tomorrow or tomorrow evening, we might get.
Sir, lastly, any upward revision in the exports growth target of 20% for this fiscal?
We should be exceeding our guidance of 400,000 units this year. In the first half, we've done more than 200,000 units. That gives us some confidence.
Good, sir. All the best. Thank you so much, sir.
Thank you.
Thank you. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead.
Yes. Hi. Thanks for the opportunity. Most of my results-related questions have already been asked. I just had a medium-term question. This 50% market share, which keeps coming back in commentary. I wanted to understand as to how important is it to get to 50%? Because while it has come down to 40%, 41%. It is on a much larger industry base. Even if you can maintain 40% in an industry which will become 6 million, 6.5 million units, it's still a very commendable achievement. How important is getting the 50%? Is there a trade-off that you are willing to take while capturing that 50% in terms of either profitability or segmental share, if you can shed some light?
What is good for India is good for Maruti, and what is good for Maruti is good for India. We believe as a market leader, we should serve the customer, and we should give mobility to more number of people. 50%. We should get it. It is important for us. On a lighter note, I thought our investors would be more ambitious than we would be. Probably your remark stems from some kind of a fear of a trade-off. We don't think that is true. All you have to do is, there's a global philosophy of Suzuki Motor Corporation by your side. If you really think about your customer, you observe, and you strive to provide it. 50% is clearly achievable. Having said that, this question came to our global president in the press conference, I think day before yesterday also.
He did mention that getting to 50% would be probably more difficult than it has ever been in the past. Having said that, we have levers available. We have eight SUV launches. SUV incremental models can really get us incremental market share. The small cars, which we have been talking about for so many years, have now shown healthy signs of recovery. All our other strengths of the company, like the brand, like our service network, like our multiple channels, the NEXA and Arena, our EV launch, our multipathway approach to carbon neutrality, all this should give us the strength to get that without a trade-off.
Great. Thanks. Thanks for the elaborate answer. If I can just, as a follow-up, these eight SUVs, I know it's still early in the year. Last year, you had talked about two new SUV launches, and the Victoris got launched, and the e VITARA has already been launched. Can we get some early guidance into next year? Will we have two new SUVs? What are the white spaces? Because Maruti, with your large market share, you're already present in so many sub-segments. What are the white spaces for these SUVs to come in, if you can help us?
Thanks for that question, but I think you'll have to retain your curiosity for some more time.
Okay. Thank you. I'll come back in the cue .
Thank you.
Thank you. The next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead.
Hey. Hi. Thanks. Good evening. My first question, Rahul, was around the same question which Amin was also asking. You have set a target which you have spoken multiple times about 50% in terms of market share, but you haven't spoken ever anything about the range in which you want to operate from profitability perspective. Many of your peers in India do talk about the sort of profitability that they would be operating at. Can you just—I can understand earlier you did spoke about that, the discounts and all of those things are a factor of a lot of things. Just on the framework, how you decide in terms of what kind of discounting you would do, the price correction that you will take, what kind of market share that you will see, are there any guardrails similar in terms of the profitability margin as well?
I completely appreciate that Maruti would want to have a higher number of volume and would want to do, as you—to quote you, what's good for India is good for Maruti. The profitability is also critical to keep on investing in future technologies, future product development, and the capacities as well. Hence, the question from that angle as well, that is there any guardrail? Is there any broader picture that you have in mind from the profitability perspective while you will be incentivizing many of the segments to drive your growth?
The answer is yes. I do not know if you're aware, Suzuki Motor Corporation on its website has set out an aspiration. Of course, aspirations, I mean, it's not easy to meet them. They always come with a rider, but they have talked about 10% margin and 50% market share. That's a very clear goal for the whole management of Maruti Suzuki .
Is there any similar number or goal for Maruti Suzuki level that you would want to share?
This 10% EBIT margin, we have also adopted as our guiding light. Management is working for it. It's on the website. Personally, I believe it's a bold step to give out this number in the public domain. It exists, and this is what management is working towards.
Okay. Got it. That's very helpful. Thanks. My second question was more near-term. Over the last two quarters, we have seen very smart improvement in the ASP, but the gross margin during this period of time has contracted. The traditional thought process that higher-priced products have higher margin doesn't necessarily work in this scheme. Can you just help that understand the decoupling of ASP and the gross margin?
As I said a little earlier, gross margin and operating margin is a function of multiple factors. You cannot just link it to the mix. Commodities play a part, forex play a part, capacity utilization play a part. There are multiple factors. You have to keep decoupling the factors to come to this. One factor alone will not give you the 100% correlation here.
Got it. Thanks. Just a clarification. Can you share the CNG mix in the quarter? That's it.
Healthy levels. We are higher than in the past.
Thank you.
Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.
Hi. Good evening, and thank you for taking my questions. My first question is just on the Victoris model. Are you able to share what the latest gross bookings count is since launch last month?
I thought you mentioned 30,000 bookings?
That's as of end October?
Yeah.
Got it. That's helpful. Second question is just a clarification on export revenue for the quarter. If you could share the quarterly retail number and the discount per unit, which I think till a couple of quarters back was close to about 30,000 per unit.
Hello?
Sorry. It was muted. I forgot to unmute. The export revenue is about INR 8,300 crore plus. Your other question was?
The retails for the quarter, the September quarter, and discount per unit that you had during the quarter?
The retail sales was about 394,000 in the quarter. Sales promotion sequentially affected us by about 75 basis points.
All right. Just lastly, on the eight SUVs launch plan over the next five to six years. I think as it stands, after the Ciaz has been discontinued and the Victoris has been launched, I think our current number of models in the market is close to 19 models. A couple of quarters back, we had mentioned that over the next five to six years, we plan to take the model count closer to 28 models. It looks like most of the new model launches are likely to be SUVs. At some point over the next two or three years, the majority of our models in the domestic market will be SUVs. Is that the right understanding? Next two to three years.
Not necessarily. Not necessarily.
Got it. Got it. There can be some small car launches in tandem with the SUVs to keep that healthy mix between small cars and SUVs in our domestic offerings.
There could be so many ways of looking at the portfolio.
Got it. Got it. Thank you very much and all the best.
Thank you. The next question is from the line of Pramod Amthe from InCred Capital. Please go ahead.
Yeah, Rahul, I wanted to get some color in terms of consumer profile in this recovery. Do you see any significant changes, either in terms of first-time buyer or rural or age profile of the buyers?
Anecdotally, our marketing colleagues have mentioned we see a lot of helmets coming into our showrooms, which is a good sign because people who had never considered buying a car before, they are now actively considering. The other aspect is that the top 100, I think, grew by 50%. The non-top 100 cities, beyond top 100, they grew by 65% in terms of bookings. It looks like it's a broad-based recovery.
Looking at the first-time buyers, do you see first-time buyers increasing? Do you need to do product interventions in these small cars? That segment has not seen much as compared to peers. You, being a leader, you take that responsibility. Is that fair to understand?
There is some increase in the first-time buyers. These have been days of high sales pressure, so we are yet to get our data on it.
Related to GSTs also, do you see a decent reduction in the service charges because the parts have come down and that shifting organized/unorganized and the parts sales business? How do you see this? Is there any significant change?
Sorry, I didn't get it.
No. There has also been a lot of auto component parts where the GST has been reduced. Does it have a meaningful impact on service?
Nothing. Nothing. Nothing meaningful.
Sure. Thanks. Thank you, Lewis.
Just to add to your, the share of small cars has gone up from about 16.5%- 20.5% in the smallest four vehicles that we have in our portfolio.
Okay. For the festive retail?
Before and after 22nd September.
Sure. Thanks, indulgers.
Thank you. Ladies and gentlemen, this was the last question for today. With that, we conclude today's conference call. On behalf of Maruti Suzuki India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.