India’s automobile sector could see gradual margin improvement from the third quarter of FY2026-27 as manufacturers’ price hikes help offset higher commodity costs, according to a report by Motilal Oswal Financial Services. The sector recorded strong second-quarter demand, with passenger vehicle growth at 31.2% and commercial vehicle growth near 29% year-on-year. However, potential El Niño effects and further escalation of the West Asia crisis remain key risks to profitability and future growth.
