Maruti Suzuki Board Approved Rs 4,960 Crore Land Acquisition to Add Up To 1 Million Units Capacity

Maruti Suzuki India Limited (MSIL) has signalled a massive long-term commitment to the Indian automotive sector with the Board’s approval of a Rs 4,960 crore land acquisition at the Khoraj Industrial Estate in Gujarat. This strategic move, facilitated through the Gujarat Industrial Development Corporation, is designed to lay the groundwork for a staggering 1 million units of additional production capacity. This expansion comes at a critical juncture as the company’s current infrastructure—spanning Gurugram, Manesar, Kharkhoda, and Hansalpur—is operating at near-maximum levels. With an existing capability of approximately 26 lakh units per annum already fully utilised, this new site is essential for Maruti to maintain its dominant market leadership and meet surging domestic and international demand.

The financial framework for this expansion reflects a balanced approach to capital management, with the company opting for a combination of internal accruals and external borrowings. While the initial investment of nearly Rs 5,000 crore covers land acquisition and preparatory activities, the total capital expenditure for the phased installation of manufacturing lines will be finalised by the Board in the coming months. This aggressive scaling is rooted in a fundamental belief that the Indian economy's consumption story remains robust. As management noted, the company’s fortunes are intrinsically tied to national growth: "What is good for India is good for Maruti."

Performance-wise, Maruti Suzuki closed the 2025 calendar year on a historic high, proving the necessity of this capacity boost. In December 2025 alone, the company sold 217,854 units, with domestic sales reaching an all-time high of 182,165 units. The total sales for CY2025 reached a record-breaking 2.35 million units, bolstered significantly by a massive surge in exports, which totalled 395,648 units. These figures highlight a shift in Maruti’s profile from a purely domestic player to a global export hub, with the management describing the export trajectory as a "very happy story" resulting from years of consistent regional diversification and network building.

The recently concluded Q3 FY25 financial results further underscore this operational strength. The company reported its highest-ever quarterly Net Sales of Rs 368 billion, up from Rs 318.6 billion in the previous year. Net profit also saw a healthy climb of 12.6 per cent, reaching Rs 35.25 billion. While the standalone EBIT margin saw a slight dip to 10.0 per cent compared to the preceding quarter, the overall fiscal health remains peerless. The company has delivered a remarkable 34.7 per cent CAGR profit growth over the last five years, all while maintaining a shareholder-friendly dividend payout ratio of 30.5 per cent, proving that it can fund massive expansions while rewarding investors.

Geographically, Maruti’s growth is becoming increasingly well-distributed. Beyond the Indian heartland, the company is seeing "excellent growth" in Africa, Latin America, the Middle East, and the ASEAN region. Latin America, in particular, has emerged as a high-performing market due to the successful launch of new models that resonate with local consumer preferences. This global footprint is supported by structural drivers, including a vast dealership network, robust customer-friendly practices, and a modernising model lineup that offers greater choice to a diverse set of buyers.

Looking ahead to FY26, the company remains optimistic yet data-driven, awaiting the industry consensus expected by the end of February to quantify specific targets. Since the company's inception in 1981 and its subsequent evolution into Suzuki Motor Corporation’s largest subsidiary (with SMC holding a 56.28 per cent stake), Maruti has transitioned from a government joint venture to a global manufacturing powerhouse. As the company prepares to integrate another million units of capacity, it stands poised to capitalise on the next wave of Indian motorisation and the growing global appetite for its vehicles.

Disclaimer: The article is for informational purposes only and not investment advice.