Small Cars Drive Maruti’s Growth, Sustainability of Demand in Focus

, the country’s largest carmaker, reported its highest-ever quarterly revenue of ₹50,959 crore in Q3FY26, up 28% YoY, driven by record sales of 667,769 units. Profit after tax rose 4% YoY to ₹3,879 crore, impacted by a ₹593 crore one-time labour code provision. To meet surging demand, the company will add 500,000 units of annual capacity across its Haryana and Gujarat plants in the coming months. Sales and Segment Performance - Domestic sales: 564,669 units, up from 466,993 units YoY. - Incremental growth largely from small cars, benefiting from 18% GST bracket and additional price cuts. - Small cars accounted for three-fourths of the 97,676 unit increase in domestic dispatches. - Network inventory at just 3–4 days, with a healthy order book of ~175,000 vehicles. Financial Performance - Revenue: ₹50,959 crore, up 28% YoY. - PAT: ₹3,879 crore, up 4% YoY, but weighed down by labour code provision. - Industry-wide passenger vehicle sales grew 21% YoY to 1.27 million units, per SIAM data. Capacity Expansion - Kharkhoda, Haryana: +250,000 units by April 2026. - Hansalpur, Gujarat: +250,000 units soon after. - Total planned addition: 500,000 units, aimed at sustaining growth momentum. Management Commentary and Outlook - Executives highlighted robust demand across segments, with production running on Sundays and holidays to meet orders. - Some models curtailed to prioritize small car production. - Management remains cautious, noting the need to assess sustainable demand levels once GST-driven euphoria subsides. - Industry growth forecast: 7% in FY27, led by 10% growth in small cars. Valuation and Investor View - Record sales and capacity expansion reinforce Maruti’s leadership. - Near-term growth visibility is strong, but sustainability of demand post-GST cuts will be closely monitored.