Auto sector Q1 results preview: Margin pressure looms despite strong demand; Hyundai, Tata Motors PV among top picks

Nuvama Institutional Equities expects the Indian auto sector to post 22 percent year-on-year revenue growth in Q1FY27 driven by robust demand across passenger vehicles, two-wheelers, commercial vehicles and tractors, but EBITDA growth is estimated at only 10 percent due to rising commodity costs linked to the West Asia conflict. Domestic PV volumes grew 26 percent YoY, two-wheeler domestic volumes rose 19 percent with exports up over 30 percent, and CV domestic volumes grew 19 percent. Despite margin pressures, the brokerage remains constructive on the sector with top picks being Hyundai Motor India, Tata Motors PV, Eicher Motors, Samvardhana Motherson and ASK Automotive.