1QFY27F: Steep margin pressures, but easing likely from 2HFY27F Strong demand momentum; prefer EV plays such as Ather, Sonacoms, and M&M

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1QFY27F: Steep margin pressures, but easing likely from 2HFY27F Strong demand momentum; prefer EV plays such as Ather, Sonacoms, and M&M

Global Markets Research

8 July 2026India Autos

EQUITY: AUTOS & AUTO PARTS

1QFY27F: Steep margin pressures, but easing likely from 2HFY27F Research Analysts

India Autos & Auto Parts

Strong demand momentum; prefer EV plays such as Kapil Singh - NFASL

kapil.singh@nomura.comAther, Sonacoms, and M&M

+91 22 403 74199

1QFY27F results preview: Ather, TMCV, TVSL, EXID and SONACOMS could Siddhartha Bera, CFA - NFASL

surprise positively, while HYUNDAI, HMCL, MSIL, MOTHERSO and UNOMINDA siddhartha.bera@nomura.com

could surprise negatively +91 22 403 74362

In 1QFY27, domestic volume growth momentum remained robust across segments. PVs

reported strong 26% y-y growth followed by tractors (19% y-y), while 2Ws (19% y-y),

LCVs (18%) and MHCV’s (14% y-y) were also healthy.

Our dealer surveys continue to indicate robust demand continuing despite fuel

price increases and price hikes by OEMs to pass on costs. We continue to believe

that EV penetration in India is at an infection point (link). EV adoption trends continue

to surprise positively across segments with EV penetration for PVs at 10.6% and 2Ws at

7.6%, (Fig.3). Hence, we prefer companies that are likely to gain from

electrification, due to their early lead in EV technology. In general, OEMs which are

market share leaders in ICE appear most at risk to lose market share in case of

faster electrification. Fig.3

Commodity cost headwinds have eased following the de-escalation of the West Asia war

and geopolitical risks (Fig.4 and Fig.5). Considering the lagged pass-through of

commodity costs, we expect OEMs to report meaningful margin pressure in 1QFY27F, but