Maruti Suzuki India Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Raghunandhan NL - Nuvama Wealth - Analyst : Thank you, sir, for the opportunity. Thanks for sharing the impact on EBIT on a Q-o-Q basis. A follow-up on that, relating to the other expenses item which went up 90 basis points, this is more lumpy and seasonal in nature. So ideally, this shouldn't be continuing in the subsequent quarters. Would REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 12:30PM, MRTI.NS - Q4 2025 Maruti Suzuki India Ltd Earnings Call that be correct? And also on the commodity side, there was an impact of 20 basis points. How do you see for the subsequent quarter how much can be the impact of commodity given that there has been an increase in steel prices and there is also the safeguard duty?

Question: Raghunandhan NL - Nuvama Wealth - Analyst : Yes, sir. In fact, I wanted to request your thoughts on a few important topics for industry and company. Can you talk about how you're seeing the impact of safeguard duties, this free trade agreements? Also if you can talk a bit about CAFE and the hybrid potential?

Question: Raghunandhan NL - Nuvama Wealth - Analyst : Lastly, your thoughts on hybrid?

Question: Raghunandhan NL - Nuvama Wealth - Analyst : How do you see the potential? Can we expect more launches from your end?

Question: Raghunandhan NL - Nuvama Wealth - Analyst : Thank you very much, sir. Very helpful.

Question: Pramod Kumar - UBS Securities - Analyst : Thanks a lot for the opportunity. Rahul, sir, my question is regarding the profitability because volumes hit an all-time high for a quarter, but EBITDA and EBIT per vehicle have kind of hit a second quarter low or almost a two-year low. So how should one look at profitability on a per vehicle basis? I understand the percentage will get impacted because of the new plan rammed up. But if you can just help us understand how should one look at the margins in the near to medium term when there's seasonality, weaker demand on a sequential basis? So how are you looking at profitability in terms of absolute EBITDA per vehicle or EBIT per vehicle? If you can share your thoughts on that.

Question: Pramod Kumar - UBS Securities - Analyst : So Rahul, sir, you talked about predicting volumes being easier. So how do you see the domestic volume market because you did talk about weaker demand. So if you could just quantify what does your economic model suggest as potential growth for the industry in FY26? And also on a related note, exports, is it fair to assume that we should still aspire to do double-digit growth despite the global macro situation and thanks to the kind of order backlog we have on Jimny, so is double-digit a fair expectation for FY26.

Question: Pramod Kumar - UBS Securities - Analyst : Final one from my side. If I look at the opening remarks from the CFO and you, there have been some lumpy or seasonal items in the quarter. If all put together, what will be the quantification of that when you look at next quarter? Because next quarter, we'll also have seasonally weaker volume. So I'm just trying to understand how these lumpy items, how much of that we are able to shed in the next quarter to kind of offset the operating (inaudible). So if you can just help us understand the one-off nature in 4Q, in totality.

Question: Pramod Kumar - UBS Securities - Analyst : Fair enough, sir. Very insightful. Thanks a lot. Thank you.

Question: Binay Singh - Morgan Stanley - Analyst : Hi team. Thanks for the opportunity. Just starting on this point about mix being a 40-basis-point or so headwind. Could you expand a little bit? Does it have to do with exports? Also, we saw export share being down this year. And if you could also share the CNG mix this quarter and last quarter? That's the first question.

Question: Binay Singh - Morgan Stanley - Analyst : Just the fourth quarter, like in your opening comment, you added that mix is a 40-basis-point headwind. So I assume that you're mentioning sequential headwind of 40 basis points due to the mix. Because one of the things we see is also export share dropping quite sharply

Question: Binay Singh - Morgan Stanley - Analyst : Another way of asking this question, next year, export as a percentage will go up. So is that favorable mix for you or neutral, negative, positive?

Question: Binay Singh - Morgan Stanley - Analyst : Okay. So CNG is also down.

Question: Binay Singh - Morgan Stanley - Analyst : So in a way, all these three mixes in a way were moved adversely for you. Exports was down, small car share went up, SUV was down, and CNG was down. But in your view, mainly the domestic is defining the gross margin changes rather than exports shares.

Question: Binay Singh - Morgan Stanley - Analyst : And secondly, right now, we talked about a new plant ramp-up having some headwind. But is there any cost item which will not repeat next quarter? Anything which has to do with starting the plant? Because we understand, staff and all will be more linked to ramp-up of plant. But is there anything linked to this which is only specific to the first quarter of a plant starting and won't repeat in this 30-basis-point headwind?

Question: Binay Singh - Morgan Stanley - Analyst : Thanks. And just last one, will seven-seater Grand Vitara qualify as a new SUV in your view or is that a variant?

Question: Binay Singh - Morgan Stanley - Analyst : Okay. That is something for us to look forward to. Thanks a lot, team.

Question: Gunjan Prithyani - BofA Global Research - Analyst : Hi. thanks for taking my questions. Just sort of going back to the margin queries. I know there have been quite a few. But this plant-related cost, just to be clear, the entire cost for the quarter has been taken into account, right? We shouldn't be looking for any increase from this 120 crore-odd number that we've accrued in this quarter?

Question: Gunjan Prithyani - BofA Global Research - Analyst : No, sir. I was just trying to understand because it was -- you commissioned middle of the quarter, that doesn't matter. We've accrued the cost for the entire quarter, right? That's the fair conclusion?

Question: Gunjan Prithyani - BofA Global Research - Analyst : Okay. Got it. And just another one on the cost side now. We did see some RM pressure in this quarter coming from steel, but it looks like there is more to go given the safeguard duty and generally, the increase that we've seen in the HRC prices. Is there anything that you can give us a sense on what sort of headwind can come through on the steel side? And a little bit on the price hikes that we've taken. We had two announcements, one in Feb and then in April. What does this mean in terms of blended price hike? Did any of this reflect in quarter four? And how much will it be for quarter one of fiscal '26?

Question: Gunjan Prithyani - BofA Global Research - Analyst : Okay. I mean, of course, the blended price, on aggregate, would be much lesser than the range that we announced. So I'm just trying to understand, can you quantify that blended increase? And I'm also trying -- the reason I'm asking this is there's also improvements that you're doing like you called out six air bags in every car, so are these price hikes to cover up those costs or is it just the normal course of annual hikes that we take?

Question: Gunjan Prithyani - BofA Global Research - Analyst : Okay. Got it. And just second question on e-Vitara, can you just sort of refresh us with the timeline? When do we see the domestic volume launch? And again on the export side, when do we see the exports signing any timelines on price and wheel and exports on e-Vitara?

Question: Gunjan Prithyani - BofA Global Research - Analyst : Okay. Got it. And can you just share the details for the quarter, the normal housekeeping numbers, retails, and the rural and urban growth numbers, if you have them handy?

Question: Gunjan Prithyani - BofA Global Research - Analyst : Okay. Thank you so much.

Question: Jinesh Gandhi - Ambit Capital Private Limited - Analyst : Hi. My question pertains to a couple of things. One is on the discount side, can you share the number? And secondly, when we talk of increasing cost because of new plant, our employee cost doesn't seem to have increased much in the last two quarters. So would there be further increase on that side or this is the reflection of the new plant as well, what you're seeing in this quarter on the employee side?

Question: Jinesh Gandhi - Ambit Capital Private Limited - Analyst : Right. Yeah. That was my question. So is that going -- will we see a step-up there because it's a fairly large plant and then a new location. So should there be increase from where we are in percentage of pay for a (inaudible)?.

Question: Jinesh Gandhi - Ambit Capital Private Limited - Analyst : Okay. Got it. And lastly, what kind of CapEx do we expect for FY26 as against INR10,000-odd crore in FY25?

Question: Jinesh Gandhi - Ambit Capital Private Limited - Analyst : This is including SMG or excluding SMG?

Question: Jinesh Gandhi - Ambit Capital Private Limited - Analyst : Got it. Thanks and all the best.

Question: Chandramouli Muthiah - Goldman Sachs - Analyst : Hi. Good evening and thanks for taking my questions. My first question is just on capital allocation. I think, we have potentially more than INR60,000 crore of net cash on the books, almost 20% of our market cap. So just trying to understand, over the next two or three years, are you thinking about returns to shareholders as potential use of this cash on the books, just in terms of your shareholders total return strategies?

Question: Chandramouli Muthiah - Goldman Sachs - Analyst : Got it. That's helpful. My second question is just around the product pipeline for the next few years. You have said that you want to get to 28 models by the end of the decade. And there could be some consumption stimulus over the next couple of years in the form of the pay commission, both central and state pay commissions, over the next two to three years. So just trying to understand, the previous pay commission, we had the benefit of the launches on Baleno and Brezza which really helped the company's growth. So over the next two to three years, is that sort of compact SUV REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 12:30PM, MRTI.NS - Q4 2025 Maruti Suzuki India Ltd Earnings Call segment, maybe premium (inaudible) segment, something that we focus on in our new product launch plans just to take advantage of some of these stimulus measures which might benefit market growth over the coming cycle?

Question: Chandramouli Muthiah - Goldman Sachs - Analyst : Got it. That's helpful. And lastly, just a housekeeping question, I think the retail number for the quarter was asked earlier, but I just also wanted to check (inaudible).

Question: Chandramouli Muthiah - Goldman Sachs - Analyst : Got it. Just the export revenue and the royalty number please.

Question: Chandramouli Muthiah - Goldman Sachs - Analyst : Got it. Thank you very much and all the best.

Question: Pramod Amthe - InCred Capital - Analyst : Hi. Thanks for taking my question. So the first question is with regard to sourcing. Post this sale, steel protectionism or similarly, the trade barriers which are going up in the globe, how are you looking at the sourcing of your current product mix? And also going into the EV space, do you look at the dependence on one nation, how you plan to reduce it to the next three to five years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 12:30PM, MRTI.NS - Q4 2025 Maruti Suzuki India Ltd Earnings Call

Question: Pramod Amthe - InCred Capital - Analyst : Okay. And the second one is with regard to the new plant which has come up. How do you see it playing out in your overall scheme of production planning? Second, similarly for sourcing arrangement within amongst your plants, what's the benefit it can bring onto the table?

Question: Pramod Amthe - InCred Capital - Analyst : Sure. And the last question, Rahul, is with regard to as EV comes into place this first staff, how are you looking at it's, I would say, the overhang in terms of profitability? Or should it be headwind in profitability in the short term? Or should it be because export-oriented, we should be able to position it better and limit the impact? And second, how are you trying to mitigate this as it gets more and more domestic volume (inaudible) connects on the EV? Are there any levers which you're looking at next two to three years to neutralize it?

Question: Pramod Amthe - InCred Capital - Analyst : And what's the progress on some of the PLI schemes which you applied? Can it benefit you guys as you go forward? What to expect there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2025 / 12:30PM, MRTI.NS - Q4 2025 Maruti Suzuki India Ltd Earnings Call

Question: Pramod Amthe - InCred Capital - Analyst : Sure. Thanks and all the best.