Suzuki Q1 FY2027: Revenue Jumps 22% but Raw Material Costs Force Profit Warning

Suzuki's consolidated revenue for the first quarter (April–June 2026) rose 22.0% year-on-year to ¥1,705.8 billion. Operating profit grew a more modest 11.2% to ¥158.0 billion, but pretax profit surged 61.2% to ¥283.2 billion and net profit attributable to owners of the parent jumped 80.0% to ¥183.6 billion, mainly due to a ¥130.6 billion gain on financial assets. The strong top line was driven by robust four-wheeler sales in India and Pakistan, supported by a weaker yen. India continued to benefit from demand recovery after last year's GST revision, while Pakistan saw buoyant demand. However, rising raw material costs from Middle East tensions are eating into margins, an effect expected to intensify over the full year.

The automobile segment, Suzuki's core business, posted revenue of ¥1,541.7 billion, up 22.6%, with operating profit rising 12.5% to ¥134.3 billion, fueled by strong sales in India and Pakistan. Two-wheeler revenue grew 18.7% to ¥124.4 billion, and operating profit rose 13.1% to ¥14.4 billion, helped by solid demand in India, Latin America, and Europe. Marine revenue rose 15.6% to ¥36.8 billion, but operating profit slipped 6.8% to ¥8.5 billion as raw material costs weighed. The other segment (including electric wheelchairs and solar power) saw revenue decline 14.1% to ¥2.8 billion, operating profit down 7.3% to ¥0.7 billion. The breakdown is shown in the table below.

Suzuki raised its full-year revenue forecast to ¥6,900.0 billion, up 9.6% from the prior year, reflecting a weaker yen assumption and firm global sales. But it cut its operating profit forecast to ¥540.0 billion, a 13.3% decline, as raw material costs from Middle East instability are expected to offset ¥80.0 billion in positive factors from currency, volume, and cost cuts. Pretax profit is now seen at ¥720.0 billion (down 1.5%), and net income at ¥420.0 billion (down 4.4%). The company plans annual dividends of ¥51 per share, up ¥5, with interim ¥25 and year-end ¥26. See comparison table below.

Total assets rose to ¥6,798.4 billion, up ¥161.5 billion from the end of fiscal 2026, boosted by profit accumulation and higher market values of financial assets. Liabilities declined ¥22.5 billion to ¥2,461.2 billion. Total equity increased ¥184.0 billion to ¥4,337.1 billion, lifting the equity ratio to 52.1% from 51.0%. Operating cash flow was ¥86.4 billion (vs ¥64.0 billion a year ago), investing cash flow an outflow of ¥4.4 billion (vs ¥27.3 billion), and financing cash flow an outflow of ¥54.8 billion (vs ¥34.1 billion), leaving cash and equivalents at ¥1,006.6 billion. Suzuki plans to keep borrowings at current levels given global uncertainties. The annual dividend of ¥51 per share represents a ¥5 increase.

Key risks cited include: geopolitical tensions in the Middle East disrupting supply chains and inflating raw material costs; volatile steel and non-ferrous metal prices; currency swings; economic conditions in India, ASEAN, and Europe; and intensifying competition in the global EV transition. To counter these, Suzuki pledges to accelerate profit-improvement measures such as better sales mix, cost reduction, and fixed-cost cuts.