Maruti vs TATA CONSUMER PRODUCTS 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.

Tata Consumer Products reported a strong Q3 FY25 with consolidated revenue growth of 17% YoY to INR 4,444 crore, driven by broad-based volume growth of 7% in India Beverages and robust performance in Foods (31% total, 11% organic). However, consolidated EBITDA was flat YoY due to significant margin pressure in the India Tea business, where input costs rose 25-30% while only 40% was passed through via pricing. Management expects Q3 to be the peak of margin pressure, with gradual easing as price hikes flow through and new tea crop arrives in Q1 FY26. International and non-branded businesses delivered strong margin expansion. The company is prioritizing long-term competitiveness in tea, focusing on volume growth and market share gains. Risks include sustained high tea/coffee prices, competitive intensity in RTD, and slower-than-expected ramp-up of Capital Foods and Organic India.

Guidance read

Tea margin pressure to ease from Q4 FY25: Management expects Q3 to be the peak of tea margin pressure, with gradual improvement as price hikes flow through and new crop arrives in Q1 FY26. Capital Foods and Organic India acceleration in Q4: After stabilization, focus shifts to accelerating growth with innovation and expansion into food services and pharma channels, expecting a substantial jump in Q4. Growth businesses to contribute 30% of portfolio: Target for growth businesses (Sampann, Soulfull, etc.) to grow at 30% and contribute 30% of portfolio; currently at 27% contribution with 89% growth. Pharma channel expansion for Organic India: Piloted in 10 cities, pharma channel to expand to 40 cities next year, driving significant uplift for Organic India.

Risk read

Key risks include Sustained high tea prices — Tea input costs remain elevated with only 40% passed through; if prices don't ease or further hikes aren't taken, margins could remain under pressure for two more quarters.; Coffee price volatility impacting non-branded demand — Coffee prices at 50-year highs; management is cautious on inventory and notes potential demand destruction if prices persist.; Competitive intensity in RTD business — Analyst raised concern about new entrants and pricing aggression; management acknowledged matching deeper retail margins, impacting revenue growth.; Urban slowdown impact on premium portfolio — Analyst questioned volume growth in Salt and Sampann given urban slowdown; management noted urban growth is low single digits excluding modern trade and e-commerce..

Promise ledger

Of 2 tracked promises, management 0 met, 0 close, 2 missed.