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Informist, Thursday, Apr. 16, 2026

 

By Anand JC

 

MUMBAI – The bottom line of automobile companies in the Nifty 200 index is expected to contract in the March quarter despite these companies registering double-digit growth in wholesale sales, according to analysts. The 15 automobile companies that are part of the wider index are expected to report a fall in their collective net profit for the second consecutive quarter, primarily because of poor performance by Hyundai Motor India Ltd. and Tata Motors Passenger Vehicles Ltd.

 

Indian automobile companies sold 9.40 million vehicles in the latest quarter, up 23% on year. Of this, domestic sales grew 24% on year to 7.64 million units, and exports grew 23% on year to 1.75 million units. "Retail demand remained intact even as most OEMs (original equipment manufacturers) hiked prices, usually done every new CY (calendar year), with indication of taking further hikes if RM (raw materials) and fuel prices remain inflated," Prabhudas Lilladher said in a report, warning that input costs and supply-chain constraints pose risks to margins despite the robust growth in sales.

 

The 15 automobile companies are expected to report an aggregate net profit of INR 238.85 billion, down 2% on year, according to the average of estimates from 15 brokerages. This is better than the December quarter during which these companies' bottom line had contracted 28% on year, but much worse than the year-ago quarter when their profit had grown nearly 53%.

 

This weakness in bottom line performance is primarily because of Tata Motors PV and Hyundai Motor, whose combined profit accounts for one-fifth of the 15 companies' aggregate profit. Tata Motors PV is expected to report a profit for the first time in three quarters for the reporting period. Its consolidated net profit is expected to fall 48% on year to INR 37.57 billion, according to the average of estimates from eight brokerages.

 

To enable a like-for-like comparison, the net profit and revenue of Tata Motors Passenger Vehicles for the year-ago quarter were calculated by adding the profit and revenue of Jaguar Land Rover and Tata Motors' passenger vehicle segments in the comparable quarters. Tata Motors PV was demerged from Tata Motors last year and started reporting its earnings separately from the September quarter.

 

While Tata Motors PV's India business is expected to do well year-on-year, the performance of its UK-based subsidiary, Jaguar Land Rover, may falter as the luxury carmaker continues to recover from the crippling cyber-attack in late August. JLR accounts for nearly 80% of Tata Motors PV's overall revenues. The subsidiary also faces stiff competition in key markets such as the US, the UK, and China, where it is witnessing weaker sales.

 

Hyundai Motor's Jan-Mar consolidated net profit is expected to decline 25% on year to INR 12.11 billion, according to an average of estimates from 10 brokerages. Hyundai Motor is projected to report a double-digit fall in its net profit because of high input costs, higher expenses, and depreciation costs because of setting up a new plant in Talegaon, Pune.

 

The 15 automobile companies' top line is expected to rise 17% on year to INR 3.35 trillion for the March quarter, according to the average of estimates from 15 brokerages. If achieved, this would translate to a marked improvement over the December quarter when these companies' revenue had grown almost 5% on year, but much poorer than in the year-ago quarter when their revenues had increased 67% on year.

 

MARGIN PRESSURE

Prices of precious metals, steel, aluminium, copper, and other materials have risen in recent months, prompting automakers to take price hikes. Analysts have warned that automobile companies' margins are being impacted by an increase in raw material costs during the March quarter.

 

However, this may be largely offset by the benefits of operating leverage, they said. Automakers typically get operating leverage when their fixed costs are spread over a larger volume of output, buoying profit growth. Indian automakers manufactured 9.34 million vehicles in the March quarter, up 19% on year.

 

Additionally, the rapid depreciation of the rupee against the dollar during the March quarter is projected to be a mixed bag for automobile companies. The rupee's depreciation is expected to support the realisations for companies with a higher focus on exports, according to Asit C. Mehta Investment Intermediates. However, crude and crude-linked products, and other raw materials are priced in dollars, which could weigh on companies' margins.

 

"While margins may face pressure from elevated discounting, higher raw material costs, and increased advertising spends during the quarter, this is likely to be partially offset by a favourable product mix, continued traction in higher-value models, stronger export contributions, and benefits from USD appreciation," Nirmal Bang Institutional Equities said in a note.

 

While automobile companies may feel some impact of the rise in raw material prices in the March quarter, they may face further impact in the upcoming quarters if supply-chain risks persist because of the war in West Asia, according to Prabhudas Lilladher.

 

ANCILLARIES

Automobile ancillary firms may report profit growth in the March quarter because of the double-digit growth in production across vehicle segments, analysts have said. Tractor production volumes went up 45% on year in the March quarter, while the replacement segment volumes saw a high-single to low-double-digit on-year growth, according to Kotak Securities.

 

Tyre companies that have a higher exposure to the domestic market are expected to perform well because of lower raw material prices in the reporting quarter. "However, we would like to note that margins will come under pressure from 1QFY27E (June quarter), given the sharp increase in rubber and crude oil prices," Kotak Securities said. Bearing companies may report revenue growth because of improvements in revenue from the industrial segments, replacement segments, and export markets.

 

Market participants will closely track managements' views on rising commodity costs, their impact on margins, and the measures taken by companies to deal with these pressures.

 

Following are the Jan-Mar earnings estimates for 15 automobile companies which are part of the Nifty 200, from 15 brokerages:

Company name	Sales, INR million	PAT, INR million	Sales Y-o-Y Change %	PAT Y-o-Y Change %	Sales Q-o-Q Change %	PAT Q-o-Q Change %	EBITDA, INR million	Result date	Number of estimates available
Ashok Leyland	141,110	14,080	18.51	11.79	22.34	27.48	20,302	--	13
Bajaj Auto	157,847	26,360	29.94	28.63	3.71	2.80	32,492	May. 6	15
Bharat Forge	23,169	3,749	7.11	2.45	11.19	11.32	6,477	--	4
Bosch	53,756	6,201	9.47	11.99	10.03	12.19	7,103	May. 20	1
Eicher Motors +	59,390	14,437	13.32	5.98	(2.86)	(2.19)	14,877	--	14
Exide Industries	44,161	2,930	6.17	15.09	9.59	9.85	5,132	May. 4	8
Hero MotoCorp	125,182	14,023	25.95	29.73	1.54	(4.45)	18,103	--	13
Hyundai Motor India +	192,318	12,107	7.20	(25.00)	7.00	(1.92)	20,516	--	10
M&M	384,216	34,896	21.55	43.18	(1.34)	(13.40)	54,439	May. 5	13
Maruti Suzuki	514,976	41,137	26.61	10.85	3.22	(6.25)	60,851	Apr. 28	15
MRF	80,503	6,875	15.93	38.09	1.47	(9.10)	13,322	--	5
Samvardhana Motherson International +	328,728	12,613	12.13	20.07	4.66	17.86	32,195	--	9
Sona Blw Precision Forgings +	12,174	1,788	40.19	7.26	0.74	(6.35)	3,012	--	7
Tata Motors PV +	1,101,761	37,566	13.00	(47.82)	57.15	N.A.	97,630	--	8
TVS Motor Co.	125,868	10,089	31.79	18.40	0.89	2.76	16,191	--	14
Total	3,345,158	238,850	17.43	(2.33)	16.91	28.90

 

Notes:

+ Consolidated Figure

Y-o-Y: Year-on-Year

Q-o-Q: Quarter-on-Quarter

N.A.: Not Available

 

Estimates from:

Anand Rathi Share and Stock Brokers Ltd, Centrum Broking Ltd, Dolat Capital Market Pvt Ltd, Elara Securities (India) Pvt Ltd, Emkay Global Financial Services Ltd, Equirus Securities Pvt Ltd, HDFC Securities Ltd, ICICI Securities Ltd, IDBI Capital Market Services Ltd, Indsec Securities and Finance Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak Securities Ltd, Motilal Oswal Financial Services Ltd, Nirmal Bang Equities Pvt Ltd, Nomura Equity Research, Nuvama Wealth Management Ltd, Prabhudas Lilladher Pvt Ltd and YES Securities (India) Ltd.

 

End

 

Compiled by Mayur Nijap

Edited by Tanima Banerjee

 

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