Auto makers likely to report strong June-quarter volumes, but weaker margins

Kumar Rakesh, Analyst – IT & Auto at BNP Paribas, expects the June quarter to be the weakest for auto sector margins as commodity inflation pressures profitability. He believes price increases and easing input costs should support recovery from the September quarter through the end of the fiscal year. BNP Paribas prefers Mahindra & Mahindra and Maruti Suzuki among passenger vehicle makers and Eicher Motors in two-wheelers, while maintaining a positive long-term outlook for electric vehicle adoption despite near-term volatility.