Maruti Suzuki Q2 FY27 profit falls 27% to Rs 2,415 crore

MARUTI Maruti Suzuki India Limited reported Q2 FY27 standalone net profit of Rs 2,414.9 crore, down 26.9 percent, while net sales rose 26.1 percent to Rs 50,615.5 crore. Q2 FY27 numbers (standalone): Net sales: Rs 50,615.5 crore, up 26.1 percent YoY EBITDA: Rs 4,763.3 crore, down 6.3 percent YoY; margin about 9.4 percent vs 12.7 percent PAT: Rs 2,414.9 crore, down 26.9 percent YoY Volume: 696,654 units, up 26.5 percent; domestic up 33.6 percent Why it matters: volume is strong and utility vehicles grew 52.3 percent, but material costs rose to 79.9 percent of net sales from 75.7 percent. The company cited commodity prices and forex, and mark-to-market losses cut other income. Maruti Suzuki [MARUTI][***** closed at Rs 13,058.89 on 11 November on StockGro, up 16.1 percent over one month but down 14.3 percent over one year. It is 24 percent below its 52-week high of Rs 17,146.83. P/E is 30.52 against a sector P/E of 19.21. My view: hold, not a fresh entry. Sales are strong, but the stock is up 16 percent in a month while profit fell 27 percent. At 30.5 times trailing earnings, the price is paying for margin recovery, not for the earnings in hand. The P/E is high because those earnings carry the cost squeeze. Holders can keep the position. Fresh money should wait for the Q3 FY27 result showing material costs back at or below the 75.7 percent of a year ago, with EBITDA margin rising. Invalidation: a close below Rs 11,450, the 27 October close before the results, which would undo the rally. What would change my mind: a falling material cost ratio. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.