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Maruti Suzuki Q3 FY'26 Results: A Deep Dive into "The GST Bounce Back"

Lesson 213/323 | Study Time: 20 Min

Course: Quarterly Result Updates & Analysis

Maruti Suzuki Q3 FY'26 Results: A Deep Dive into "The GST Bounce Back"

CMP: ₹15,391 | Market Cap: ₹4,84,337 Cr | Sector: Automobile

Maruti Suzuki has delivered a landmark performance in Q3 FY'26, characterized by a sharp volume recovery following historic GST reforms and the successful amalgamation of Suzuki Motor Gujarat (SMG). As India’s largest carmaker, the company is now scaling capacity to meet a robust order book of 175,000 vehicles.

1. The Financial Growth Table (Standalone Restated)

All figures in INR Million except Volume and EPS

Metrics	Q3 FY'26 (Current)	Q3 FY'25 (YoY)	YoY Growth %	Q2 FY'26 (QoQ)	QoQ Growth %
Sales Volume (Units)	667,769	566,213	+17.9%	550,874	+21.2%
Net Sales	475,344	368,020	+29.2%	401,358	+18.4%
Op. EBITDA	55,717	50,646	+10.0%	50,848	+9.6%
PAT (Net Profit)	37,940	36,593	+3.7%	33,028	+14.9%
EPS (Basic INR)	120.67	116.39	+3.7%	105.05	+14.9%

Segmental Domestic Sales Performance (9M FY'26)

Segment	Unit Sales	YoY Growth %	% Share of Domestic
Mini + Compact	673,233	+5.5%	46.9%
Utility Vehicles (SUV)	541,266	+2.3%	37.7%
Vans	104,902	+2.3%	7.3%
LCV	28,465	+12.5%	2.0%

2. Sector-Specific KPIs & Manufacturing Insights

EBITDA Margins: Stood at 11.7% in Q3 FY'26. Note that margins were impacted by a one-time provision of ₹5,939 million for New Labour Codes; adjusting for this, margins would have been approximately 125 bps higher (~13.0%).
Volume Growth: Total sales grew 17.9% YoY, led primarily by the small car segment benefiting from the 18% GST bracket.
Capacity Expansion: To address supply constraints, the second plant at Kharkhoda and the 4th line in Gujarat are scheduled for commissioning by April 2026, each adding 250,000 units annually.

3. Profitability & Valuation Suite

Profitability Ratios

ROE (TTM): ~15.9%.
ROCE: ~21.7%.
Operating Margin (EBIT): 8.1% (Sequential decline from 8.4% in Q2 due to commodity headwinds).

Valuation Matrix (as of Feb 12, 2026)

Current P/E: 32.4x.
5-Year Average P/E: 44.3x (Currently trading at a ~27% discount to its 5-year mean).
Price to Book (P/B): 4.9x.
Debt-to-Equity: 0.00 (Virtually Debt-Free).

4. Beat/Miss Analysis & Concall Criticals

The Verdict: Volume Beat, Margin Miss. While revenue surged on GST-led demand, net profit growth was muted by one-off labor costs and rising commodity prices (PGM, Aluminum).

Critical Concall Insights:

Inventory Health: Network inventory is at an all-time low of 3–4 days, indicating that demand is significantly outstripping current supply.
The "Helmet" Indicator: Management noted a 7% increase in first-time buyers, anecdotally observing many 2-wheeler owners upgrading to cars following tax cuts.
EV Strategy: Export of the e VITARA has commenced to 29 countries; domestic launch is "very soon," supported by a goal of 100,000 charging points by 2030.

5. Future Growth Outlook (FY26-27)

Trend Analysis: Revenue growth has accelerated from 10.5% in H1 FY26 to 29.2% in Q3, showing a clear upward trajectory.
Operating Leverage: With capacity utilization reaching peaks and new plants coming online in early FY27, operating leverage is expected to provide a 190 bps tailwind to margins as one-off costs recede.
Peer Comparison: Maruti (P/E 32.4x) remains competitively priced against M&M (31.2x) and Hyundai India (33.3x), especially given its dominant 46% share in PV exports.

Conclusion: The Wealth-Building Perspective

Maruti Suzuki is currently in a "Capacity Catch-up" phase. The combination of a massive order backlog, GST-led demand structural shifts, and a debt-free balance sheet makes it a core contender for long-term wealth building. Following our Step 4: Valuation Strategy, we focus on intrinsic value vs. current market sentiment.

Fairvalue:

https://docs.google.com/spreadsheets/d/e/2PACX-1vQFEKf15LcXaacY6V8loNAjlIjhJVWQ4rDC4bVE3pdKoB7SNUV27txAlNZL_-cRrA/pubhtml?gid=336847664&single=true

Disclosure: This analysis is for educational purposes only and does not constitute a direct buy/sell recommendation.

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Piyush Patel

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