loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Auto OEMs manage commodity inflation with calibrated price hikes amid double digit volume growth

ICICIdirect Research 31 Jul 2026 DISCLAIMER

In Q1FY27 PV volumes delivered a record-breaking performance, with sales hitting 12.7 lakh units, up 26% YoY, making it the strongest Q1 on record on the back of improved affordability following the GST rate reduction.

Mahindra & Mahindra: healthy demand and ensuing capacity expansion plans to support growth

  • M&M delivered steady results in Q1FY27 with 23% YoY revenue growth to ₹41,920 crore, driven by 23% YoY growth in automotive volumes and 18% YoY growth in tractor sales.
  • It leads the SUV segment with a revenue market share of 25% while also retained its market leadership in tractor space with market share at ~45%.
  • Amid sharp rise in commodity prices (300-500 bps), auto segment EBIT margins were down 240 bps QoQ at 7.1%, while farm equipment segment margins declined by 90 bps at 18.5%.
  • Management unveiled a multi-year SUV capacity expansion plan to increase production from ~64,500 units/month currently to ~1.32 lakh units/month by FY31 i.e., 2x over FY26-31 period.
  • With capacity expansion roadmap in place, we rate M&M as Buy with a SOTP-based target price of ₹4,000 (15x FY28E standalone EV/EBITDA; 20% hold co. discount to investments)

Eicher Motors: resilient performance, finalises greenfield expansion plans

  • Eicher Motors reported another strong quarter with 32% YoY revenue growth to ₹6,632 crore, supported by 24% YoY growth in volumes. EBITDA margins at 24% (down ~90 bps QoQ).
  • The company approved a ₹1,225 crore greenfield investment (Phase I) to expand manufacturing capacity from 1.5 million units currently to 2.45 million units annually by FY30, reflecting confidence in sustained demand.
  • With sustaining premium motorcycle demand, expanding international presence, we continue to assign BUY rating on the stock. We value EML at ₹ 9,160

Hyundai Motors: retains volume & margin guidance for FY27 despite muted Q1FY27

  • Hyundai Motor India delivered a mixed quarter as volumes declined 1% YoY at 1.78 lakh units due to temporary supplier disruptions, while EBITDA margin moderated to 9.3%.
  • Lost production has already been recovered & company reaffirmed its 8–10% FY27 volume growth guidance
  • Although commodity inflation (around 200 bps YoY) and plant stabilization costs weighed on profitability, management reiterated its 11-14% EBITDA margin guidance.
  • The company is confident of achieving 8-10% volume growth in FY27E despite the production loss in Q1. This coupled with margin recovery should support healthy double-digit earnings growth going forward. We maintain BUY rating with target price of ₹ 2,520 i.e. 28x P/E on FY28E EPS

 

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere