Maruti Suzuki India Ltd Q2 FY27 Results Analysis: PAT Falls 27%, Margin Reversal Begins

Maruti Suzuki India Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 53,340.20 Cr (+26.00% YoY) and PAT growth of -26.90% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Revenue grew 26.0% YoY on a supply-led volume ramp running ~2.8x management's 10% growth guide, but PAT fell 26.9% YoY as EBITDA margin compressed 326 bps on a +430 bps material-cost blowout. The promised margin reversal has begun (+78 bps QoQ EBITDA), with the Q3 settlement-cycle pass-back the key swing factor toward the 8%+ band. The balance sheet remains debt-free and cash-rich, and a post-quarter ITAT order with stated ~Rs.13,000 Cr positive tax impact is an unbooked potential catalyst.

Key Investment Insights

Key Positives

• Revenue from operations grew 26.0% YoY to Rs.53,340.2 Cr (+1.7% QoQ)
• EBITDA margin recovered +78 bps QoQ to 9.41% and EBIT margin +47 bps QoQ to 5.54% as material-cost ratio improved 58 bps QoQ
• YTD volume growth of +27.87% is ~2.8x management's 10% own-volume growth guidance
• H1 CFO of Rs.5,473.3 Cr at 0.95x PAT, up from 0.70x in H1 FY26; FCF turned positive at Rs.834.3 Cr vs (Rs.841.7) Cr
• Zero-borrowing balance sheet with Rs.65,537.9 Cr non-current investments and Rs.5,734.7 Cr cash/investments
• Post-quarter favourable ITAT order (15 Oct 2026) with stated ~Rs.13,000 Cr positive tax impact, not yet booked

Risk Factors

• PAT fell 26.9% YoY to Rs.2,414.9 Cr while revenue grew 26.0% — every profit line declined ~26-28%
• EBITDA margin compressed 326 bps YoY to 9.41%, driven by a +430 bps YoY material-cost ratio increase
• Other income collapsed 77.1% QoQ to Rs.429.8 Cr, a Rs.1,536.3 Cr YoY drag at PBT level
• Rs.2,838.7 Cr inventory build in the quarter (production ahead of sales) with H1 inventory up Rs.1,487.4 Cr since March
• Unquantified EPR-certificate obligation under End-of-Life Vehicles Rules 2025 flagged in the auditors' review report