Maruti, Hero among automakers boosting earnings with exports as domestic demand remains on shaky ground

Maruti Suzuki India Ltd, the country’s largest carmaker, and Hero MotoCorp Ltd, the biggest two-wheeler company, relied on export growth of 17% and 43%, respectively, to post a surge in profit and revenue during the year. Both companies recorded their slowest growth in domestic sales since FY22. Maruti Suzuki’s sales grew 3% to 1.9 million vehicles, while Hero MotoCorp’s sales increased by 5% to 5.9 million during the previous fiscal.

TVS Motor Company Ltd, Mahindra & Mahindra Ltd and Eicher Motors Ltd were among the companies that recorded a surge in exports, although their domestic sales growth remained decent. TVS Motor’s exports grew 18% to 1.2 million two-wheelers. Mahindra’s overseas shipments grew 41% to 34,709 vehicles, while Eicher Motors’ Royal Enfield exports grew by 30% to 100,136 motorcycles.

Data from the Society of Indian Automobile Manufacturers indicated that domestic passenger vehicle sales grew 2% to 4.3 million, but exports surged by 15% to 770,364 units. Two-wheeler sales in the domestic market grew by 8% to 24.6 million units while exports grew by 19% to 5.2 million units.

Analysts said the growing share of exports in the portfolio of auto companies is helping them in expanding margins, thus increasing profitability.

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“International sales are generally more profitable for Indian auto companies, and that’s one of the reasons earnings have seen a boost in FY25," said Shridhar Kallani, an auto research analyst at Axis Securities. “Exports typically fetch better margins because they offer higher selling prices, benefit from a favourable exchange rate, and involve lower discounting compared to the intensely competitive domestic market."

Growth booster

For Maruti Suzuki, exports are increasingly emerging as a driver of growth.

“We are growing better because exports have been very buoyant. In the coming year, exports are expected to grow by 20%. This is going to be the main driver for our production, sales, and profits," RC Bhargava, chairman of Maruti Suzuki, said during a post-results media briefing on 25 April.

After a 3% growth in domestic car sales, the New Delhi-based company posted a 7.5% increase in profit to ₹14,500 crore in FY25. Encouraged by the strong growth in the overseas market, Maruti plans to export the majority of the 70,000 electric cars it will produce this fiscal.

Hero MotoCorp reported a 5% rise in domestic sales of motorcycles and scooters, but exports grew 44%, albeit on a lower base, which helped the company post a 16% jump in profit to ₹4,610 crore. Company executives noted during the earnings call on 14 May that sales growth in the overseas market is expected to increase in the current financial year as it chalks an expansion plan.

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Hero will enter the European and the UK market during the second half of this financial year. Its new electric Vida Z model to be launched in July will be sold in Europe and the UK.

Hyundai Motor India, the local subsidiary of South Korean auto giant Hyundai, is also relying on exports to help it beat the domestic market blues. It is targeting a 7-8% growth in exports in the current financial year. Hyundai India’s sales in the domestic market declined by 3% during the year.

“We will grow in line with the industry within the country. The focus will be on exports growth to offset domestic market challenges," said Tarun Garg, chief operating officer at Hyundai Motor India.

Positive outlook

The major markets abroad for Indian auto companies include Southeast Asia, Latin America and Africa.

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While macro challenges like weak Africa recovery and volatility in Sri Lanka and Bangladesh exist, most manufacturers expect FY26 to be strong, said Sanket Kelaskar, an institutional equity analyst at Ashika Group.

“There are structural scale-up targets of the companies. A ramp-up in earlier entry markets will help. Despite some near-term risks, the medium-term export outlook remains positive," Kelaskar said.