Indian Automobile Industry Q1 Earnings Overview
M&M is all set to mark a remarkable 26% growth in revenue, contrasting the rest of the key automobile players who are anticipated to witness a single-digit revenue decline. Axis Capital has begun covering Hyundai India with a ‘buy’ recommendation and a target price of Rs 1,950.
Quarterly Scorecard Updates
Some of the top carmakers in the Indian market, including Hyundai Motor, Mahindra and Mahindra, and Maruti Suzuki, are gearing up to disclose their financial performance for the April-June period. Hyundai Motor will lead the pack with its quarterly results announcement scheduled for Wednesday.
M&M is projected to continue its robust growth in revenue and profit propelled by volume growth, unlike its counterparts in the industry. Other major players like Hyundai, Maruti, and Tata Motors are likely to see profits decline significantly by 11-29% due to the prevailing challenges in the auto industry.
Challenges Faced by Automobile Players
One of the major impediments faced by these carmakers is the impact on sales this quarter, resulting in weak financial figures. Hyundai and Tata Motors have experienced a YoY sales downturn of 6% and 10% respectively. On the flip side, M&M continues to demonstrate impressive growth of 22%, driven by vehicles like Thar Roxx and XUV 3XO.
While Maruti has shown a mere 1% volume growth, the overall industry growth forecast for FY26 is a modest 1-2%, indicating continued pressure on growth despite the recent wedding season boost in May and June.
Global Tariffs Impact
Tata Motors is facing the global repercussions of US tariffs on its Jaguar Land Rover business. Despite the relief from the US-EU trade agreement, the adverse effects of tariffs are expected to reflect in the June quarter’s earnings.
The prevailing tariffs on Tata Motors’ Defender model manufactured in Slovakia have surged to 27%, resulting in a projected 29% profit decline for the quarter. The future implications of the US-EU trade deal are crucial for alleviating these challenges.
Future Outlook and Key Aspects
Analysts are closely monitoring the carmakers’ commentary on Q2 sales performance and the anticipation of new car launches, including Maruti’s EV debut. The upcoming July sales data release from Aug. 1 onwards will provide further insights into the industry’s performance. Additionally, the demand during the festive season will play a pivotal role in shaping the carmakers’ performance in the upcoming quarters.
Stay tuned for more updates!
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