India Autos: The terms of trade are in favour of customers; companies to take the hit for now... 1QFY27 preview

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India Autos: The terms of trade are in favour of customers; companies to take the hit for now... 1QFY27 preview

J P M O R G A N Asia Pacific Equity Research

07 July 2026

India Autos

The terms of trade are in favour of customers;

companies to take the hit for now… 1QFY27 preview

We expect most companies under our India auto coverage to report strong DD YoY Indian Automobiles, Auto parts and

revenue growth supported by a recovery in volumes. EBITDA and earnings growth Transportation

will materially underperform as the industry has prioritised volumes over margins Amyn Pirani AC

during the current commodity upcycle. This is different from the FY19-25 period (91-22) 6157-3583

when customers bore the brunt of regulatory as well as commodity inflation while amyn.pirani@jpmorgan.com

OEMs and Government benefited from higher prices, GST collections and Harshit Mittal

margins. The Government gave back some of these gains in the form of GST cuts (91-22) 6157-3152

last year and now the OEMs are “giving back” by not taking adequate price hikes. harshit.mittal@jpmorgan.com

India Materials & LogisticsWe believe this trend could continue for a few quarters as OEMs are in capacity

expansion mode and targeting market-share gains. During the quarter, the key Vibhav Zutshi, CFA AC

focus for investors would be: 1) sustenance of current volume strength, especially (91-22) 6157-3585

as we get closer to the GST anniversary (Oct-2026), and 2) commentary on whether vibhav.zutshi@jpmorgan.com

J.P. Morgan India Private Limited, J.P. Morgan

commodity inflation has peaked out in 1Q or could continue in 2Q (our base case). Tower, Santacruz(E), Mumbai - 400098, SEBI

In this volatile scenario, our preference would remain with companies likely to Registration: INH000001873, (91-22) 6157-3000.