New Delhi [India], July 12 (ANI): India’s auto authentic tools producers (OEMs) are prone to witness margin pressures in Q1FY26E, impacted by increased uncooked materials (RM) prices and working deleverage, based on a report by HDFC Securities.
The report added that elevated costs of key inputs, significantly metal and platinum group metals, are anticipated to weigh on gross margins, whereas decrease seasonal volumes might additional pressure EBITDA margins.
For two-wheeler (2W) OEMs, an adversarial home product combine, weaker export contribution, and decrease electrical car (EV) combine have added to the challenges.
The report added that minor pricing revisions are anticipated throughout two-vehicles (2W) and business car (CV) gamers, triggered by the implementation of recent regulations–OBD 2 norms from April 1, 2025 for 2Ws and AC cabin norms from June 8, 2025 for CVs.
The report added that auto ancillary firms are additionally beneath strain, with subdued international demand and tariff uncertainty clouding long-term planning.
Tyre makers might get some aid from decrease uncooked materials costs, whereas some gamers may gain advantage from a drop in aluminium prices, the report added. However, export-focused corporations face dangers from rising ocean freight prices and potential disruptions. Delays within the return of migrant labourers might additional impression operations, the report said.
Adding to the sector’s considerations is an imminent scarcity of rare-earth magnets, important for each EV and ICE car elements. With most international processing concentrated in China attributable to its radioactive and high-cost nature, alternate options like home manufacturing or sourcing from Japan stay long-term prospects.
In the close to time period, importing absolutely assembled elements from China could be the solely viable resolution, although this could elevate prices, cut back localisation, and probably have an effect on PLI eligibility, as per the report.(ANI)