Auto sector seen posting 24.5% Q1FY27 volume growth as raw material costs squeeze OEM margins
Motilal Oswal expects demand-led 24.5% YoY volume growth in Q1FY27, led by two-wheelers (+26%) and PVs (+24%), with CVs +20% and tractors +18%. But high raw material costs are set to compress OEM EBITDA margins by 100-200bp to 9.6%, capping profitability. Ancillary PAT growth pegged at 10%.
MOFS expects Indian auto sector to post 24.5% YoY demand-led volume growth in Q1FY27, led by two-wheelers and passenger vehicles, but high raw material costs will compress OEM margins by 100-200bp, limiting profitability.