Maruti vs Grasim Q3 FY26

Maruti Suzuki reported a stellar Q3 FY26, with net sales surging to INR 47,500 crore (up ~29% YoY) and PAT at INR 3,800 crore (+4% YoY, impacted by a one-time provision of INR 594 crore for new labor codes). The GST reform drove a 22% domestic volume growth, with retail sales hitting a record 683,000 units and inventory at just 3-4 days. Management highlighted robust demand across segments, a 7% increase in first-time buyers, and a healthy order book of 175,000 vehicles. However, margins faced headwinds from commodity inflation (PGM, aluminum, copper) and rare earth supply issues. Guidance includes two new plants (Kharkhoda and Gujarat D-line) coming online by mid-2026, each adding 250,000 units capacity. Key risk: sustainability of demand post-GST euphoria and potential steel price hikes.

Guidance read

Two new plants to add 500,000 units capacity by mid-2026: Kharkhoda second plant (April 2026) and Gujarat D-line (soon after) each add 250,000 units annual capacity. Export volume target of 400,000 units for FY26: On track to achieve the export guidance of 400,000 units for the current fiscal year. CapEx run rate of INR 10,000 crore per year: Current CapEx run rate is about INR 10,000 crore annually; next year's budget to be finalized by March. Sustainable volume growth of ~7% initially estimated: Management had given an initial sustainable volume growth figure of about 7%, to be reassessed in three months.

Risk read

Key risks include Post-GST demand sustainability — Management acknowledged that Q3 demand included some postponed and preponed elements; sustainable demand level needs reassessment.; Commodity inflation (PGM, steel, aluminum, copper) — PGM content is ~2% of net sales; steel prices may rise due to safeguard duty misuse. Hedging is calibrated and may not fully offset spikes.; Rare earth supply constraints — Rare earth element supply issues caused 20 bps margin impact; management expects resolution as India develops local magnet manufacturing.; Export tariff risks (South Africa, global trade) — Potential increase in duties in South Africa and other global trade/tariff issues pose risks to export growth..

Promise ledger

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

Grasim reported a strong Q3 FY26 with consolidated revenue of INR 44,312 crore (+25% YoY) and EBITDA of INR 6,215 crore (+33% YoY), driven by robust performance across building materials, financial services, and core businesses. Birla Opus paints gained 300 bps revenue market share YoY, with volume up 70% YoY, and the B2B platform Birla Pivot crossed an INR 8,500 crore annualized run rate, ahead of its FY27 guidance. The chemicals business saw stable demand, while the renewables and financial services segments posted strong growth. Management maintained its target of INR 10,000 crore revenue for Birla Opus by FY28 and guided for breakeven at Birla Pivot by FY27 exit. Key risks include sustained discounting pressure in the paints industry and potential margin compression from raw material volatility in chemicals.

Guidance read

Birla Opus revenue target of INR 10,000 crore by FY28: Management reiterated achieving INR 10,000 crore revenue in the third full year of operations (FY28). Birla Opus profitability target within three years: Targeting to become a profitable number two player within three years of full-scale operation. Birla Pivot breakeven by FY27 exit: Birla Pivot expects to exit FY27 at breakeven level. Renewable energy share target of 40% in chemicals by FY27: Targeting renewable energy share in chemicals to reach over 40% by end of FY27.

Risk read

Key risks include Paints industry discounting pressure — Industry revenue growth lags volume growth due to high discounting and focus on low-value segments, which could pressure realizations.; Epoxy margin compression from raw material volatility — Management noted they avoided low-margin LER volumes due to margin squeeze; ECH price volatility could impact profitability.; Dealer churn and collection risks in paints — Analyst raised concerns about dealers stopping business; management acknowledged active dealer rates of 70-75% and focus on collections.; Cheap imports impacting cellulosic fashion yarn — Subdued performance in cellulosic fashion yarn due to cheaper imports from China creating oversupply..

Promise ledger

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