Automobile Sector — Q4 FY26 Earnings Overview

Commodity headwinds caused ~100 bps margin impact in Q4 and are expected to be more severe in Q1 FY27. Management has only partially passed on costs via a 2% price hike.

Diesel is 30-50% of TCO for transporters; rising diesel prices could delay purchase decisions, especially in HCVs. Management noted customers postponing decisions.

Unprecedented 3-5% of revenue cost inflation from steel, aluminium, crude derivatives; only partially offset by price hikes.

CFO flagged 3.5-4% of revenue cost impact from commodities, with steel up 15%, copper 20%, and aluminum/noble metals up 35-45%. This could pressure margins if not fully offset.

No shipments to Middle East in last two months due to geopolitical tensions; exports to the region have been recalibrated.