Maruti vs Bajajfinsv Q2 FY26

Maruti Suzuki reported Q2 FY26 net sales of INR 40,130 crore (+12.8% YoY) and net profit of INR 3,290 crore (+7.5% YoY). Domestic volumes declined 5.1% due to pre-GST cut deferrals, but exports surged 42.2% to 110,487 units. Festive retail sales doubled to 400,000 units (vs 211,000 last year), with small cars growing 30% in October. Management guided for 6% industry growth in H2 and expects to exceed the export target of 400,000 units. The company reiterated its aspiration of 50% market share and 10% EBIT margin, supported by eight new SUV launches by 2030-31. Key risk: sustainability of the small car recovery given deferred sales and festive euphoria.

Guidance read

Industry growth of 6% in H2 FY26: Management expects overall industry growth of about 6% year-on-year in the second half and beyond. Exports to exceed 400,000 units in FY26: Given H1 exports of over 200,000 units, management expects to exceed the full-year export guidance of 400,000 units. Eight new SUV launches by 2030-31: Global President announced eight more SUVs to be launched in India by the turn of the decade, excluding Victoris and eVITARA. Aspiration of 10% EBIT margin and 50% market share: Management reiterated the goal of achieving 10% EBIT margin and 50% market share, as set by Suzuki Motor Corporation.

Risk read

Key risks include Sustainability of small car recovery — The strong festive retail sales may include deferred purchases and festive euphoria; sustainability is uncertain.; Margin pressure from discounting and mix — Higher sales promotion expenses (75 bps) and price corrections (20 bps) impacted margins; small car recovery could pressure blended margins.; Forex and commodity headwinds — Forex (JPY) and commodities (PGM) together adversely impacted margins by 30 bps; hedging gains are non-operating.; Market share recovery challenges — Global President noted that reaching 50% market share is more difficult than ever, despite product launches..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

Bajaj Finserv reported a solid Q2 FY26 with consolidated revenue up 11% to INR 37,400 crore and PAT up 8% to INR 2,244 crore (12% ex-MTM). The life insurance arm was the standout: VNB surged 50% to INR 367 crore and NBM expanded to 17.1% (from 10.8% last year), driven by product mix shift and cost optimization. General insurance GWP grew 9% (13.6% ex-one-off), though combined ratio remained above 100% at 102.3% due to upfront acquisition costs. Lending subsidiaries (BFL, BHFL) delivered strong AUM growth of 24% each with stable asset quality. Management guided for life insurance growth to re-accelerate in H2 and expects to mitigate GST ITC impact over two quarters. Key risk: elevated credit costs in unsecured MSME and two/three-wheeler segments at BFL.

Guidance read

Life insurance growth to re-accelerate in H2: After four quarters of flattish top line, management expects significant growth trajectory above industry from Q3 onwards, supported by GST tailwinds. GST ITC impact to be mitigated in two quarters: Management expects to manage the GST input tax credit burden through product restructuring and distributor negotiations within the next two quarters. Life insurance margin expansion of 4-6% for FY26 (pre-GST): Excluding GST impact, management expected NBM expansion of 4-6% for the full year, but GST noise may affect H2. BFL MSME AUM growth to be 10-12% for FY26: Bajaj Finance cut unsecured MSME volumes by 25%, leading to full-year AUM growth of only 10-12% in that segment.

Risk read

Key risks include Elevated credit costs in unsecured MSME and two/three-wheeler segments — BFL's net losses and provisions were up 19% YoY, with credit costs elevated in MSME and two/three-wheeler segments, though management is cutting volumes.; GST ITC impact on life insurance margins — The loss of input tax credit on GST is expected to impact NBM by ~450bps annualized if unmitigated. Management is working on mitigation but impact may persist for two quarters.; Motor OD loss ratio spike — Motor OD loss ratio increased to 71% in Q2, above historical trends. Management termed it a quarterly blip but it bears watching.; General insurance combined ratio above 100% — Combined ratio stood at 102.3% (101.4% ex-one-off), impacted by upfront acquisition costs for long-term motor policies. Management expects it to remain near 100%..

Promise ledger

Of 1 tracked promise, management 1 met, 0 close, 0 missed.