Maruti Suzuki and Hyundai Motor India experienced significant drops in their net profits during the second quarter of the 2026-27 financial year. Rising raw material costs and operational challenges led to weaker margins and reduced earnings for both leading carmakers.
- Maruti Suzuki's net profit declined 27% to ₹2,415 crore in Q2 FY27.
- Hyundai Motor India's net profit fell 24% to ₹1,189 crore in the same period.
- Raw material costs surged, with Maruti Suzuki's costs rising 48% and Hyundai's 29%.
- Both companies saw contractions in EBITDA margins due to increased expenses.
- Market analysts expect gradual recovery supported by new models and cost controls.
Why did Maruti Suzuki and Hyundai report lower profits in Q2 FY27?
Both companies faced sharp increases in raw material costs, which significantly impacted their profit margins. Maruti Suzuki's cost of material consumed rose by 48% to ₹37,488 crore, while Hyundai's increased by 29% to ₹15,731 crore. These rising expenses reduced their net profits despite steady sales volumes.
How much did net profits decline for each company?
Maruti Suzuki's net profit dropped from ₹3,303 crore in Q2 FY26 to ₹2,415 crore in Q2 FY27, a 27% decline. Hyundai Motor India's net profit decreased from ₹1,570 crore to ₹1,189 crore, marking a 24% fall compared to the previous year.
What happened to their operational earnings and margins?
Maruti Suzuki's earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 6.3% to ₹4,763 crore, with its EBITDA margin shrinking by 310 basis points to 8.93%. Hyundai's EBITDA dropped 24% to ₹1,578 crore, and its margin contracted by 450 basis points to 7.95%. These declines reflect the pressure from higher commodity prices and other costs.
What other factors affected Maruti Suzuki's earnings?
Besides rising commodity prices linked to geopolitical tensions in West Asia, Maruti Suzuki was impacted by adverse foreign exchange movements and lower non-operating income due to mark-to-market losses on invested surplus. These factors further reduced its earnings in the quarter.
How is Hyundai Motor India managing these challenges?
Hyundai cited commodity price headwinds as a key challenge but noted that operating leverage, a healthy product mix, and cost-reduction initiatives helped improve its EBITDA margin sequentially. Analysts expect the company’s new model cycle to support double-digit volume growth over the next two years.
What do market analysts say about future prospects?
Nomura highlighted Hyundai’s attractive valuation and projected strong earnings growth through FY29. Morgan Stanley anticipates a sharp recovery in margins, volumes, and market share in the second half of FY27. CLSA and HSBC remain optimistic about Maruti Suzuki’s volume growth guidance and demand outlook, though margin recovery may be gradual due to cautious price hikes and commodity price uncertainties.
What are Maruti Suzuki's plans moving forward?
Maruti Suzuki is focusing on a long-term approach rather than short-term pricing changes. The company aims to support faster structural growth in car demand in India. It also plans to launch a new electric vehicle at the Bharat Mobility Global Expo in February 2027, signaling its commitment to innovation and future mobility solutions.
