+
Auto Sector To Grow 22-24 Per Cent In Q1 FY27
ECONOMY & POLICY

Auto Sector To Grow 22-24 Per Cent In Q1 FY27

Credit Rating Information Services of India (Crisil) estimated that India's automobile sector is expected to report revenue growth of 22-24 per cent year-on-year in the first quarter of FY27 and to be among the largest contributors to corporate revenue growth in the quarter. The agency estimated overall corporate revenue to have grown 11-11.5 per cent year-on-year in the quarter ended 30 June 2026, the fastest pace in two years despite supply chain disruptions and higher input costs from the West Asia conflict. This compared with growth of 9.6 per cent in the preceding quarter.

Crisil said the expansion was supported by a Goods and Services Tax rate reduction of eight to 13 per cent that stimulated volume-led demand, healthy passenger vehicle retail sales, two-wheeler volumes and commercial vehicle sales, along with rising exports and selective price increases. Passenger vehicle retail sales rose 25 per cent year-on-year and commercial vehicle sales grew 15 per cent, while automobile exports were estimated to have increased 19-21 per cent, aided by demand from Japan and Africa.

The agency noted that growth was driven by demand for automobiles and white goods but that earnings came under pressure as the full effect of the West Asia conflict began to appear during the quarter. It observed that inventory buffers had cushioned the immediate impact of higher input costs in the fourth quarter of the previous fiscal. Selective price rises by manufacturers helped to moderate margin compression.

Apart from automobiles and white goods, Crisil said the power sector was supported by peak electricity demand and telecom services benefited from premiumisation and improved data monetisation. The agency added that, given current demand momentum and export tailwinds, the automobile industry should remain a principal driver of corporate revenue growth in the near term. Market participants will watch input cost trajectories and geopolitical developments for their impact on earnings.

Credit Rating Information Services of India (Crisil) estimated that India's automobile sector is expected to report revenue growth of 22-24 per cent year-on-year in the first quarter of FY27 and to be among the largest contributors to corporate revenue growth in the quarter. The agency estimated overall corporate revenue to have grown 11-11.5 per cent year-on-year in the quarter ended 30 June 2026, the fastest pace in two years despite supply chain disruptions and higher input costs from the West Asia conflict. This compared with growth of 9.6 per cent in the preceding quarter. Crisil said the expansion was supported by a Goods and Services Tax rate reduction of eight to 13 per cent that stimulated volume-led demand, healthy passenger vehicle retail sales, two-wheeler volumes and commercial vehicle sales, along with rising exports and selective price increases. Passenger vehicle retail sales rose 25 per cent year-on-year and commercial vehicle sales grew 15 per cent, while automobile exports were estimated to have increased 19-21 per cent, aided by demand from Japan and Africa. The agency noted that growth was driven by demand for automobiles and white goods but that earnings came under pressure as the full effect of the West Asia conflict began to appear during the quarter. It observed that inventory buffers had cushioned the immediate impact of higher input costs in the fourth quarter of the previous fiscal. Selective price rises by manufacturers helped to moderate margin compression. Apart from automobiles and white goods, Crisil said the power sector was supported by peak electricity demand and telecom services benefited from premiumisation and improved data monetisation. The agency added that, given current demand momentum and export tailwinds, the automobile industry should remain a principal driver of corporate revenue growth in the near term. Market participants will watch input cost trajectories and geopolitical developments for their impact on earnings.

Related Stories

Gold Stories

Next Story
Products

Interio by Godrej launches modular workplace solutions

Interio by Godrej has launched Workscapes, a modular workplace solutions category designed to help organisations configure and adapt workspaces to changing requirements. The portfolio combines mobile and compatible furniture and support elements that can be rearranged across different work modes without changes to fixed layouts.Workscapes includes Collaboration Tables, Privacy Solutions, Mobile Markerboards and Space Dividers, Power Solutions, Storage and Support Elements, Meeting and Presentation Tools, and Seating Elements. The range is designed for focused work, collaboration, informal disc..

Next Story
Infrastructure Urban

CAFE-III Gives Auto Industry Investment Clarity

The government’s new Corporate Average Fuel Economy (CAFE-III) norms have provided the automobile industry with a clearer framework for technology investments, according to industry representatives. The framework seeks to balance environmental objectives with flexibility for manufacturers while encouraging the adoption of flex-fuel vehicles and biofuels. Society of Indian Automobile Manufacturers (SIAM) President Shenu Agarwal said the five-year framework would give automakers greater predictability to plan investments and accelerate innovation. He said the regulation established annual targ..

Next Story
Infrastructure Energy

Mines Ministry to Auction Two Offshore Mineral Blocks in Andaman Sea

The Ministry of Mines will launch an auction of two offshore mineral blocks in the Andaman Sea on Thursday, seeking to unlock India’s offshore mineral potential and strengthen long-term mineral resource security. The blocks will be offered under a composite licence, which permits exploration and development activities in accordance with the applicable regulatory framework. The ministry said the auction was intended to encourage systematic exploration, attract investment and promote the use of advanced technologies for offshore mineral exploration and development. The initiative is also aimed..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code