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Money Talk

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Maruti Suzuki Faces Profit Squeeze Amid Rising Costs

A 33% slide in share price this year sets a nervous stage for Tuesday’s second-quarter earnings report. Analysts surveyed by LSEG project a 5.7% dip in net profit to 31.05 billion rupees, as the automaker struggles to balance surging revenue against the relentless pressure of global commodity inflation.

Maruti Suzuki Faces Profit Squeeze Amid Rising Costs

While revenue is expected to climb 27% to 535.8 billion rupees for the quarter ended September 30, the bottom line tells a different story. Investors are bracing for a potential decline from the 32.93 billion rupees recorded during the same period last year. The primary concern remains the company's net profit margin, which plummeted to 6.7% in the first quarter—a sharp drop from the 10.3% margin seen a year prior.

Market participants will scrutinize the report for signs of recovery in margins and the resilience of international sales. With exports having risen 29% to 124,736 units in the previous quarter, the company’s ability to sustain overseas growth is critical. Beyond sales figures, the board will face questions regarding the long-term impact of rising crude-oil prices and geopolitical instability in Iran on production costs and supply chain stability.

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