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Auto OEMs post healthy Q3’26; guides for double digit volume growth in Q4’26

ICICIdirect Research 30 Jan 2026 DISCLAIMER

Maruti Suzuki: Healthy sales volume drives topline; demand outlook remains strong
MSIL reported healthy performance in Q3FY26 with Sales volume for the quarter standing at 6.68 lakh units, up 18% YoY
Adjusted EBITDA margins for the quarter came in at 12.4%, up 35 bps QoQ.
Management highlighted a 6–7% increase in first-time buyer mix (now at 47%, back at pre-covid levels), with small cars swinging decisively back into growth after several weak quarters.
With record retail sales (~6.83 lakh units), extremely lean dealer inventory (3–4 days), and a healthy order book (~1.75 lakh units), near-term volume visibility remains strong while Q3 margins were impacted by temporary headwinds (commodity inflation, inventory depletion, forex, etc.), with ~190 bps margin support from operating leverage & 120 bps gains from lower discounts and favourable product mix.
We maintain our BUY rating on the stock with target price of ₹ 17,650; valuing it at 30x PE on avg. of FY27E-28E EPS


Tata Motors Commercial Vehicles: Reports healthy Q3FY26, riding the CV upcycle
Tata Motors CV Q3FY26 results came in healthy with Consolidated topline for Q3FY26 standing at ~₹21,732 crore (up 16% YoY)
Wholesale volumes grew ~20% YoY driven by broad-based recovery across trucks (LCV, M&HCV) & bus segments, while exports surged ~70% YoY on the back of Sri Lanka, SAARC and Middle East & North Africa.
EBITDA at ~₹2,746 crore and margins at 12.6% (up ~51 bps QoQ). Notably, EBITDA margins sustained double digits levels for the 10th consecutive quarter, supported by operating leverage, favourable mix and disciplined cost control, even as precious metals and copper inflation impacted costs (~50 bps).
Outlook for Q4 remains optimistic with continued demand momentum, benefits from price hikes to offset commodity pressures, and focus on profitable growth vs. market share gains.
With market leadership in the CV space & demand tailwinds, we continue to have a positive view on the stock. We have a BUY rating and value it at ₹ 500 on SOTP basis (13x EV/EBITDA on FY28E, 1x P/B on long term investments)

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