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Informist, Friday, Oct. 17, 2025

 

By Anand JC

 

NEW DELHI - Strong wholesale sales of tractors, two-wheelers, and commercial vehicles are expected to boost automobile companies' revenue growth for the September quarter, though weaker passenger vehicle despatches could limit this growth. Industry despatches grew nearly 10% on year during the reporting quarter, including domestic sales and exports, due to the cut in the goods and services tax and higher sales in the festival season.

 

The growth in demand for higher-value vehicles and increased exports is expected to offset the impact of higher discounts and increased advertising expenditure on the operating margins of automobile companies, analysts said.

 

The 18 automobile companies, including the seven auto-ancillary firms, that form a part of the Nifty 200 are expected to report an aggregate net profit of INR 216 billion for the reporting quarter, up just over 8% on year. This growth rate underperforms the net profit growth of the broader Nifty 200, which is projected to post a 10% profit growth. Tata Motors Ltd., which accounts for nearly 12% of the net profit of the auto companies of the Nifty 200, is the outlier with a projected 25?ll in its bottom line. Excluding Tata Motors, the profit growth forecast for the remaining 17 companies jumps to 15%.

 

Two-wheeler companies such as TVS Motor Co. Ltd., Bajaj Auto Ltd., Royal Enfield motorcycle-maker Eicher Motors Ltd. and Hero MotoCorp Ltd. are expected to report the strongest profit growth. As many as 14 of the 18 Nifty 200 automobile companies are expected to report a year-on-year growth in profit while three are likely to report a fall in profit. In the September quarter last year, only 11 of these had reported an on-year growth in profit while six had reported a decline in their bottom line. Ola Electric Mobility Ltd. is yet to turn profitable.

 

The top line of these 18 Nifty 200 auto companies is expected to be INR 3.008 trillion for the September quarter, up nearly 5% on year. These companies will likely trail the Nifty 200 in revenue growth, both year-on-year and quarter-on-quarter.

 

It was a mixed quarter for original equipment manufacturers as customers held back their purchases of automobiles for over a month after the government announced plans to cut the goods and services tax. This was a new development for the quarter which usually sees a significant period of limited-to-no sales in large parts of the country due to the inauspicious Shraddh period, which fell between Sept. 7 and Sept. 21. Sales got a boost only in the final week of September, driven by tax cuts, festive discounts, and strong demand, though supply chain issues capped the gains.

 

SALES PERFORMANCE

Indian automobile companies despatched 7.07 million vehicles to domestic dealerships in the September quarter, up 6% on year, according to data from the Society of Indian Automobile Manufacturers. Exports grew 26% on year to 1.69 million units, with all sub-segments reporting a sizeable double-digit on-year growth.

 

Two-wheelers, which account for nearly 80% of automobiles sold in India, reported a 7% on year growth in wholesale sales in the September quarter while passenger vehicles reported a 1.5?cline. Three-wheeler sales grew nearly 10% and commercial vehicle sales grew just over 8% for the reporting quarter. Tractor sales in India surged 32% in the reporting quarter and their exports grew 20%. 

 

Companies such as Hyundai Motor India Ltd., and Maruti Suzuki India Ltd. are expected to report only a single-digit year-on-year rise in their top line due to weak growth in wholesale despatches. This weakness though, is likely to be offset by the higher average selling price of their cars, driven by higher exports. Mahindra & Mahindra Ltd. is expected to report robust growth in top line and bottom line for the reporting quarter due to double-digit growth in despatches of tractor and sport utility vehicles.

 

Tractors and two-wheelers outperformed all other segments comfortably during the September quarter, as evidenced by sales data. Only five original equipment manufacturers reported a double-digit growth in despatches – Eicher Motors (up 43% on year), Escorts Kubota Ltd. (up 30% on year), Hero MotoCorp (up 11% on year), Mahindra & Mahindra Ltd. (up 16% on year), and TVS Motor (up 23% on year).

 

The revenue of automakers is expected to grow in part due to a 10% on-year growth in vehicle production as companies ramped up output ahead of festival season and also due to higher sales due to the positive momentum created by tax cuts. Companies manufactured 1.33 million passenger vehicles in the September quarter, just over 4% higher on year. They manufactured 6.93 million two-wheelers in the reporting quarter, up 11% on year.

 

The earnings before interest, tax, depreciation, and amortisation margin of automobile companies will likely fall year-on-year due to higher discounts, increased advertisement expenditure, and an impact from tariffs imposed by the US, Kotak Securities said. Companies with overseas exposure could report weak growth, the brokerage said. However, the EBITDA margin of automobile companies could improve sequentially due to seasonally higher volumes.

 

Automotive component makers are expected to report a growth in their top line in part due to the uptick in vehicle production during the September quarter. A mid-to-high single digit on-year growth in the volumes of the replacement segment will likely boost their top line growth, Kotak Securities said. "Operational performance of the auto ancillaries is expected to improve, driven by higher volumes across the sector, specifically catering to the tractor industry, the 2W (two-wheeler) premiumization trend, alongside continuous cost control efforts," Axis Securities said in a note.

 

The following are the Jul-Sept earnings estimates for automobile and ancillary companies that are a part of the Nifty 200 from 13 brokerages:

 

 

Company name	Sales, INR million	PAT, INR million	Sales Y-o-Y Change %	PAT Y-o-Y Change %	Sales Q-o-Q Change %	PAT Q-o-Q Change %	EBITDA, INR million	Result date	Number of estimates available
Apollo Tyres +	67,526	3,668	4.90	21.20	2.92	(4.26)	9,393	--	9
Ashok Leyland	95,768	7,334	9.21	12.37	9.77	23.53	11,511	--	11
Bajaj Auto	147,199	24,806	12.13	23.72	16.97	18.35	29,961	--	13
Bharat Forge	20,513	3,179	(8.70)	(8.56)	(2.54)	(6.10)	5,390	--	5
Bosch	48,777	5,629	11.00	15.49	1.86	0.63	6,439	Nov. 11	1
Eicher Motors +	60,325	14,143	41.51	28.53	19.65	17.35	15,088	--	10
Escorts Kubota	27,761	3,483	22.57	15.06	11.79	17.41	3,646	--	6
Exide Industries	44,727	3,231	4.81	8.51	(0.82)	0.83	5,431	Oct. 30	6
Hero MotoCorp	119,272	14,294	13.99	18.77	24.52	26.98	17,313	--	11
Hyundai Motor India +	175,250	15,009	1.53	9.12	6.78	9.62	23,773	--	9
M&M	339,694	40,195	17.46	4.65	(0.51)	16.51	46,546	Nov. 4	12
Maruti Suzuki	394,111	36,035	5.94	17.41	2.60	(2.92)	42,542	Oct. 31	13
MRF	73,696	4,959	9.01	8.89	(2.52)	2.41	10,762	--	3
Ola Electric Mobility +	6,845	(3,460)	(43.62)	N.A.	(17.33)	N.A.	(1,610)	--	1
Samvardhana Motherson International +	299,169	7,474	7.57	(15.04)	(0.98)	15.38	24,903	--	9
Sona Blw Precision Forgings +	10,432	1,557	12.76	8.15	22.60	24.82	2,504	Oct. 27	7
Tata Motors +	959,371	25,092	(5.43)	(24.96)	(8.11)	(36.95)	86,542	--	7
TVS Motor Co	117,698	9,576	27.54	44.52	16.75	22.99	15,100	Oct. 28	13
Total	3,008,134	216,204	4.81	8.23	0.51	2.77

 

Notes:

+ Consolidated Figure

Y-o-Y: Year-on-Year

Q-o-Q: Quarter-on-Quarter

N.A.: Not Available

 

Estimates from:

Anand Rathi Share and Stock Brokers Ltd, Axis Securities Ltd, Emkay Global Financial Services Ltd, HDFC Securities Ltd, ICICI Securities Ltd, JM Financial Institutional Securities Pvt Ltd, Kotak Institutional Equities, Motilal Oswal Financial Services Ltd, Nirmal Bang Equities Pvt Ltd, Nomura Equity Research, Nuvama Wealth Management Ltd, Prabhudas Lilladher Pvt Ltd and YES Securities (India) Ltd.

End

Compiled by Shivaji Jagatap

Edited by Vandana Hingorani

 

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