A double-digit revenue YoY growth was expected from Maruti Suzuki in December Quarter 2025. The market leader in the Indian passenger vehicle market reported consolidated revenue of Rs 49,904 crore, a rise of 29% YoY in Q3FY26. Net profit stood at Rs 3,879 crore, a rise of 4% YoY in December Quarter 2025.
Quarter 2025.
The company’s highest ever quarterly revenue was driven by volume growth of 22% YoY supported by the revival of the small-compact car segment. Maruti Suzuki also reported its highest ever retail sales of 684,000 units in December Quarter 2025. 
Despite double-digit revenue and volume growth, Q3FY26 results were mixed with operating margin taking a hit of nearly two percentage points YoY. Operating margin stood at 11.17% in December Quarter 2025 compared to 13.1%, same period previous year.
Adverse commodity prices of about 60 basis points (bps), rare earth element supply issues of about 20 bps, unfavourable fixed cost incidence (FCI) on account of inventory depletion of about 50 bps, unfavourable foreign exchange movement of about 15 bps, price reduction in few models of about 70 bps and one-time provision on account of the new labour codes leading to higher employee costs of about 125 bps were major margin headwinds witnessed in Q3FY26.
Commodity and rare earth metals supply challenges persist
Speaking on robust demand in December Quarter 2025, Rahul Bharti, CIRO and Senior Executive Officer, Corporate Affairs at Maruti Suzuki said, “Quarter 3 would have involved some element of postponed demand and some of preponed demand.” This led to inventory depletion and an unfavourable fixed cost incidence. While this can be controlled through increase in production, adverse commodity price rise and rare earth metal supply is a major concern for the auto industry. Commodity challenges refer to price volatility in copper, aluminum and platinum group metals such as rhodium, palladium and platinum. With regard to rare earth metals, Bharti said that the Government of India has invited global manufacturers to make rare earth magnets in India and the supply issues will not be for long term. Rare earth metals such as Neodymium, Dysprosium, Praseodymium and Terbium are used in vehicles to increase their efficiency, durability and resistance to high temperature.
With commodity and rare earth metal supply issues, high demand triggered by GST 2.0 has increased cost pressures for auto companies. Clarifying, current situation, Bharti said that the company is importing larger aggregates or sub-assemblies of which magnets were child parts. Thus higher imports and high air freight has led to 20 bps margin impact for Maruti Suzuki.
Capacity increase in Gujarat to meet buoyant demand
Maruti Suzuki ended Q3FY26 with a very low network inventory of just 3-4 days. In addition to this, the company has a strong order book of 175,000 vehicles. Maruti Suzuki is also focusing on exports as a major growth driver in the near future. Speaking on exports, Bharti said, “We are on track to achieve the guidance that we had given of about 400,000 units of exports in FY26.” For the 9-month period, ending December 2025, Maruti Suzuki’s sales in the domestic market stood at 1,435,945 units and exports at 310,559 units.
Maruti Suzuki management has always been strongly positive about the India growth story. In this regard, Bharti said, “We are putting up almost one plant every year. And there is no time when a new plant is not under construction or commissioning.” After the GST reforms announcement by the Prime Minister on August 15, 2025, Maruti Suzuki accelerated its capacity expansion plans. The company’s second plant at the Kharkhoda facility is scheduled to be operational by April 2026, and in addition to that, a fourth line at the existing Gujarat facility will also be commissioned. Maruti has also announced its plan to set up a second greenfield manufacturing facility in Gujarat. Currently capital expenditure (capex) run rate is about Rs 12,000 crore for FY26 which includes the Gujarat facility.
Small cars, no more bread & butter for Maruti Suzuki
Small is big for Maruti Suzuki, at least in December Quarter 2025. Goods & Services Tax (GST) reduction from 28% to 18% on small cars aided the largest Indian car manufacturer to report double-digit domestic passenger vehicle (PV) wholesales YoY growth in Q3FY26.
GST of 18% rate is applicable on small cars with length ≤ 4 m and engine up to 1,200 cc. Maruti Suzuki’s Alto, S-Presso, Swift, Dzire, Baleno, Ignis, Fronx, Celerio and Wagon R come under the 18% GST slab. Consequently, first time buyers have increased 7% for Maruti Suzuki post GST 2.0. But will this GST euphoria continue? The wholesale YoY growth for the mini and compact segment was flat in January 2026. Wholesale and retail numbers in the next few months will give a better picture.
But the small and compact car segment is no more the bread & butter business for Maruti Suzuki. In FY20, small and compact cars were 71% of total domestic volumes which has fallen to 47% in FY25. In Q3FY26, even after GST euphoria, small and compact cars remain at 47% of total domestic volumes. 
Though a late entrant in 2016, strong sports utility vehicle (SUV) lineup has positioned Maruti Suzuki as a major player in the SUV segment in India. GST for SUVs which was earlier 45%, is now 18% for compact SUVs and 40% for mid-large size SUVs. SUVs now have around 50% market share in the passenger vehicle segment in India. The latest Maruti SUV, VICTORIS has received ‘Car of the year award’ in 2025. Vitara Brezza, Ertiga, eVitara, Jimny, Fronx are doing well both domestically and in exports. UVs which were nearly 16% of total domestic volumes in FY20 now stand at 38% in 9MFY26. The company is expected to launch 8 new SUVs by 2030. But Maruti Suzuki needs to carry on with its fuel-efficient and affordable small car legacy along with the SUV segment to fulfill its 50% market share dream.