Indian automakers set for upbeat quarter, but Iran war hit looms

Automakers in the world’s third-largest car market are set to report robust quarterly earnings, while bracing for the fallout from the Iran war, which threatens to upend supply chains and spike raw material and fuel prices, analysts said.

Top Indian carmakers are expected to post revenue growth of about 11% to 26% in the fourth quarter, according to LSEG-compiled data, with steep tax cuts helping boost total sales to a record high in the fiscal year.

Industry leader Maruti Suzuki will kickstart sectoral earnings on April 28.

In the fast lane

Maruti, which makes the popular compact SUV, Brezza, is expected to deliver one of its strongest quarters, supported by a richer export mix, analysts at Morgan Stanley said.

The carmaker is expected to post 25.5% revenue growth, per LSEG-compiled data.

For Thar-maker Mahindra & Mahindra, a higher mix of electric SUVs and the price hikes taken in January are expected to support margins on a sequential basis, HDFC Securities said.

However, brokerages, including HDFC Securities, expect electric-vehicle-related spending and new model launch expenses to offset recent price increases.

Margins at Tata Motors Passenger Vehicles’ luxury unit Jaguar Land Rover are expected to recover sequentially as production restarted after the cyberattack at its UK plant last year.

The third-biggest carmaker was not included in the LSEG-compiled estimates after its October demerger from its commercial vehicles unit.

The overall industry’s wholesale volumes grew 13.2% during the quarter, faster than the 2.4% growth recorded in the same period last year.

Hyundai Motor India could be the outlier with profitability constrained by an adverse product mix, higher marketing spends and elevated input costs, analysts said.

The company is estimated to post revenue growth of around 11%, according to LSEG-compiled data.

Risk to margins

The months since India’s tax cuts in September saw a revival in showroom footfalls and a volume-led recovery across price-sensitive small cars and sport utility vehicles, while lower discounts helped lift margins.

That cushion could be thinning.

Rising prices of steel and aluminium, as well as freight costs, are beginning to weigh on profitability, analysts said, as automakers remain wary of steep price hikes given competition and regulatory constraints.

Maruti had said it will likely raise prices, following in the footsteps of its global peers Mercedes-Benz and BMW.

HDFC Securities expects margins to soften sequentially across the sector.

Analysts at CLSA estimate that carmakers would have to increase prices by about 6% to soften the impact of soaring input costs.

“For upcoming quarters, the key risk is not demand collapse, but whether rising costs begin to outpace the industry’s ability to protect margins,” analysts at Motilal Oswal said in an earnings preview note.

First Published: 

Apr 27, 2026 5:21 PM

IST