Indian Autos "Q1FY27E: Strong demand derailed by stronger commodity" Kumar

研报英文原文证据摘录

Indian Autos "Q1FY27E: Strong demand derailed by stronger commodity" Kumar

Global Research

8 July 2026ab

Indian Autos Equities

IndiaQ1FY27E: Strong demand derailed by stronger

commodity Automobiles

Pramod Kumar

Analyst

pramod.kumar@ubs.com

Q1FY27E: Demand narrative intact; focus to shift on profitability +91-22-6155 6063

Demand momentum remained robust across segments in Q1FY27, alleviating concerns Vedant Kshatriya

about the impact of fuel price increases and uncertainties arising from the Iran conflict. Associate Analyst

While healthy demand should provide some margin support across our coverage vedant.kshatriya@ubs.com

universe, the commodity basket had already begun to trend higher from Q2FY26 and +91-22-6155 6008

has risen even further since the outbreak of the conflict. As a result, the impact of higher

input costs is likely to be reflected across the sector's cost base this quarter. That said,

companies with a premium product mix and strong demand tailwinds, such as Eicher,

TVS and Bajaj (exports), have been relatively better positioned to offset cost inflation

through price increases. While CV players may see some short-term margin pressure, the

broader industry narrative remains constructive, particularly with TMCV continuing to

guide for double-digit margins even through a downcycle. PV manufacturers are likely

to report modest growth, or even a decline, in profitability on a YoY basis (Figure 1Q1FY27Epreview(RsmexceptJLR)). In

contrast, two-wheeler players appear better insulated, supported by stronger pricing

power and an ongoing premiumization trend. Within auto components, revenue

growth is expected to remain healthy; however, margins could come under pressure due

to a lag in passing through higher commodity costs, as well as elevated energy expenses