Maruti vs Bajajfinsv Q3 FY25

Maruti Suzuki reported Q3 FY25 net sales of INR 36,800 crore (+15.5% YoY) and PAT of INR 3,525 crore (+12.6% YoY), driven by festive demand and record exports of 99,020 units (+38% YoY). Domestic sales grew 8.7% YoY to 466,993 units, with rural retail up 15% vs urban 2.5%. The company unveiled the e VITARA EV with 500+ km range, targeting exports to 100 countries and aiming to be India's largest EV manufacturer within the first year. Margins faced headwinds from higher sales promotion (+20bps QoQ), ad spends (+40bps), and adverse forex (-20bps), partially offset by favorable commodities (+40bps) and operating leverage (+30bps). Management expects Q4 retail growth of ~3.5% and noted subdued demand in entry-level segments. Risk: sustained weakness in small cars and competitive intensity from capacity expansions.

Guidance read

Q4 FY25 retail growth ~3.5%: Management expects retail sales growth in Q4 to follow the 9-month trend of ~3.5%. Price hike of ~30 bps on net sales from Feb 2025: Small price increase announced to cover inflationary pressures. Kharkhoda plant to start operations in Q4 FY25: The upcoming greenfield plant at Kharkhoda is expected to begin operations within Q4 FY25. e VITARA production to begin soon; aspire to be largest EV manufacturer in India within first year: Production of the e VITARA EV will start soon, with ambition to become India's largest EV maker within the first year of production.

Risk read

Key risks include Subdued demand in entry-level segments — Entry hatchbacks saw degrowth, mid-hatch flat, while premium hatch grew. Weakness in lower segments remains a challenge.; EV profitability unlikely to match ICE in near term — Management acknowledged that EV profitability per vehicle will not match ICE for a long time due to higher costs and government support needed.; Competitive intensity from capacity expansions — Multiple OEMs are expanding capacity, which could increase competitive intensity and pressure margins.; CAFE 3 norms uncertainty — CAFE 3 norms are yet to be announced; management did not provide specific EV penetration targets, relying on technology mix agility..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.

Bajaj Finserv reported a mixed Q3 FY25. Consolidated revenue grew 10% YoY to INR 32,042 crore, while PAT rose 3% to INR 2,231 crore. Excluding unrealized MTM, core PAT grew 23%. BAGIC delivered strong performance with 39% PAT growth and a combined ratio of 101.1%, though top-line growth was distorted by regulatory changes. BALIC saw muted individual-rated new business growth due to product mix recalibration and new surrender regulations, but retail protection surged 96% YoY. Bajaj Finance posted a healthy quarter with 26% net income growth and ROE of 19.08%. Management emphasized a shift toward profitable growth, particularly in life insurance, with VNB growth prioritized over top-line. Key risks include prolonged disruption from surrender regulation adjustments and competitive pressure in health insurance. The Allianz JV exit discussions remain preliminary.

Guidance read

BALIC VNB growth to outpace top-line growth: Management expects VNB to grow faster than top-line due to product structure changes and focus on profitability. BAGIC to maintain combined ratio better than market: Continued focus on profitable growth with combined ratio superior to industry average. BFL to reduce loan losses next year: Management committed to bringing down loan losses in the coming year.

Risk read

Key risks include Surrender regulation disruption in life insurance — New surrender value guidelines have impacted product mix and distribution, with agency channel taking longer to adjust.; Health insurance pricing and commission pressures — IRDAI capping senior citizen premium hikes and EOM limits may pressure margins, though Bajaj is well-positioned.; Allianz JV exit uncertainty — Allianz's intention to exit the JV is at preliminary stage; no details provided, creating strategic uncertainty..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.