F1Q27 Preview: Margins To Bottom Out

研报英文原文证据摘录

F1Q27 Preview: Margins To Bottom Out

Idea

July 6, 2026 05:48 PM GMT

Morgan Stanley India Company Private Limited+MIndia Autos & Shared Mobility | Asia Pacific Binay Singh

Equity Analyst

F1Q27 Preview: Margins To Binay.Singh@morganstanley.comSushrut Ghalsashi, CFA +91 22 6118-1158

Research Associate

Sushrut.Ghalsashi@morganstanley.com +91 22 6118-1073

Bottom Out

F1Q27 was impacted by the sharp increase in commodity costs

and supply chain issues. Demand remains healthy and

commodity costs are cooling off which should help in margin India Autos & Shared Mobility

expansion from F3Q27 onwards. Maruti, M&M and TVS remain Asia Pacific

Industry View Attractive

our preferred picks.

Looking back vs looking ahead: F1Q27 was impacted by sharp ramp-up in

commodity costs, isolated supply chain issues and other macro headwinds. Among

4W OEMs, we see the sharpest QoQ EBITDA margin decline in Ashok Leyland, Tata

PV and MSIL. We see relatively stronger margin profiles for 2W OEMs vs 4W OEMs.

Within 2W OEMs, we see the most QoQ EBITDA margin impact at Hero while key

exporters such as Bajaj and TVS see limited margin headwinds. We see BHFC's

consolidated EBITDA growing at 14% YoY as a stronger performance in the

standalone business is offset by a weaker subsidiary performance. For SAMIL, we

see a 90bps YoY improvement in margins (down 200bps QoQ). For tyre

manufacturers, we see sharp commodity cost headwinds impacting gross margins.

Falling lead prices and strong demand could drive improvement in margins for

battery suppliers. See our F1Q27 estimates for 4Ws: Exhibit 1 ; 2Ws: Exhibit 2 and

Suppliers: Exhibit 3 .

Commodity costs appear to be softening; Margins to improve from Dec Quarter

onwards: Our commodity cost tracker shows that spot commodity prices are 7-8%