Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Maruti Suzuki India Ltd (BOM:532500, Financial) achieved a historic production milestone of 2 million units in financial year '25, becoming the only passenger vehicle manufacturer in India to reach this landmark.
- The company recorded its highest-ever annual sales of 2.23 million vehicles, including the highest-ever export of 3.32 lakh vehicles, maintaining its position as the top exporter of passenger vehicles in India for the fourth consecutive year.
- Maruti Suzuki India Ltd (BOM:532500) launched two new models, the fourth-generation Swift and the all-new dazzling Dzire, which received an overwhelming customer response.
- The company accelerated its captive solar power generation capacity to 78.2 megawatts peak capacity in financial year '25, achieving this target one year ahead of plan.
- The company registered the highest-ever net sales of about INR1,451 billion in the financial year, a growth of 7.5% over the previous year, and achieved a highest-ever net profit of INR139.5 billion.
Negative Points
- The growth rate of the PV industry moderated sharply from 8.4% in financial year '24 to 2.5% in financial year '25, affecting the growth of entry segment cars.
- The operating profit margin EBIT decreased to 8.7% of net sales in quarter four, compared to 10% in the third quarter of financial year '25, due to several adverse expenses.
- The share of hatchback segment continued to shrink, reducing to 23.5% in financial year '25 from a high of 46% in financial year '19.
- The company faced adverse expenses due to the commercial production of a new plant, commodity prices, and increased advertisement expenses, impacting margins.
- The domestic market demand is not growing significantly, with entry-level cars not participating in the growth story, posing a challenge for future growth.
Q & A Highlights
Q: Can you explain the increase in other expenses by 90 basis points and the impact of commodity prices on future quarters?
A: The increase in other expenses is due to higher CSR expenses, repair and maintenance at the Manesar plant, and digitization initiatives. Regarding commodities, the impact is mainly from steel prices. We are monitoring the situation closely. - Arnab Roy, CFO
Q: How do you see the impact of safeguard duties and free trade agreements on the industry and company?
A: The safeguard duty on steel has been managed well by the government, and we are not directly affected. Discussions on FTAs are ongoing, and we expect the government to make decisions in the best interest of the industry. - Rahul Bharti, CIRO
Q: What is the outlook for domestic and export volumes in FY26?
A: We expect modest domestic growth of 1-2%, but we aim to outperform with new SUV launches. For exports, we anticipate a 20% growth, driven by strong demand and new models. - Rahul Bharti, CIRO
Q: Can you elaborate on the impact of the new plant on costs and margins?
A: The new plant's costs have been accounted for, and as production ramps up, we expect normalization. The initial costs are due to the plant's start-up phase, but sales will offset these as production increases. - Arnab Roy, CFO
Q: What are the plans for the e-Vitara launch and its expected impact on sales?
A: We plan to start sales of the e-Vitara in the first half of the financial year, with a target of 70,000 units, primarily for export. This will help us leverage economies of scale and improve our market position. - Rahul Bharti, CIRO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
