--- title: "Auto Q4FY26 preview: Strong volume-led growth, but margin pressure emerges" type: "News" locale: "en" url: "https://longbridge.com/en/news/283241874.md" description: "Analysts predict a revenue growth of 17-20% for automotive companies in Q4FY26, driven by strong volume expansion across various segments. However, profitability trends are mixed, with Ebitda growth expected between 12-20%. While some brokerages foresee slight margin expansion, others anticipate a minor contraction due to rising input costs. Notable growth is expected for companies like Maruti Suzuki and Bajaj Auto, while Hyundai may underperform. Input cost inflation is a concern, potentially impacting margins in the upcoming quarters. Overall, Q4FY26 shows strong volume-led growth but faces margin pressures." datetime: "2026-04-18T21:02:43.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283241874.md) - [en](https://longbridge.com/en/news/283241874.md) - [zh-HK](https://longbridge.com/zh-HK/news/283241874.md) --- # Auto Q4FY26 preview: Strong volume-led growth, but margin pressure emerges Analysts see revenue growth for automotive companies in Q4FY26 in the range of 17–20 per cent, underpinned by double-digit volume expansion across passenger vehicles (PV), two-wheelers (2W), and commercial vehicles (CV) segments. Demand has been supported by improving affordability following GST cuts, healthy financing availability and festive tailwinds, along with better realisations driven by lower discounting and a favourable product mix. However, profitability trends remain mixed: Ebitda growth is seen broadly in the 12–20 per cent year-on-year range for the sector, with some outliers on either side, as operating leverage, scale benefits, and favourable currency partly offset rising input costs. On margins, views diverge—while some brokerages expect marginal expansion of around 50–70 basis points led by mix and leverage, others flag flat to slight contraction (up to around 20 basis points decline) due to commodity inflation, indicating that cost pressures are beginning to cap the benefits of strong volume growth. Building on this, brokerages remain aligned that demand momentum in Q4FY26 has been broad-based across segments, though the drivers vary. According to Nuvama, 2W volumes rose around 25 per cent year-on-year, supported by improved affordability post GST cuts and better financing access, while exports also grew over 25 per cent. PV volumes grew relatively modestly around 12 per cent year-on-year domestically, but exports surged over 30 per cent, aided by favourable currency and mix improvement. CV volumes increased around 20 per cent year-on-year, driven by improved freight availability and financing, while tractors remained the standout with around 33 per cent year-on-year growth on the back of strong rabi sowing and rural support measures. Motilal Oswal’s channel checks are similar, pegging aggregate industry volumes at around 23 per cent year-on-year, with 2Ws up 25 per cent, PVs 15 per cent, CVs 22 per cent, and tractors 33 per cent, underscoring that the quarter’s growth has been volume-led rather than purely pricing-driven. At a company level, the growth is expected to translate into strong top-line prints. Nuvama estimates Maruti Suzuki’s revenue to grow around 28 per cent year-on-year, while Centrum pegs 27 per cent year-on-year revenue growth with Ebitda growth estimated at 46.5 per cent year-on-year and margins expanding to 12.1 per cent (up 161 basis points year-on-year), driven by better mix and lower discounting. In two-wheelers, Bajaj Auto is expected to post around 29 per cent revenue growth year-on-year with Ebitda growth of around 30–35 per cent, while TVS Motor’s revenue is seen rising around 32 per cent year-on-year, aided by both domestic and export strength. Hero MotoCorp is expected to see mid-20 per cent revenue growth, though margin expansion remains modest, supported mainly by scale. In PVs, divergence is sharper. While Maruti and Mahindra & Mahindra are expected to deliver strong double-digit growth (M&M earnings up around 33 per cent year-on-year as per Motilal Oswal), Hyundai is likely to underperform with mid-single-digit revenue growth (around 6–7 per cent year-on-year) and Ebitda decline of over 20 per cent year-on-year, hit by higher commodity costs, elevated marketing spends and costs related to its Talegaon plant. Tata Motors’ India PV business is expected to see a sharp about 53 per cent revenue jump, but this is offset by weakness in JLR, where margins are likely to compress by around 500 basis points due to tariffs, higher VME and lower scale, dragging consolidated profitability. In CVs, Tata Motors’ CV division and Ashok Leyland are expected to deliver high-teens to mid-20 per cent revenue growth, supported by strong volumes. Kotak Institutional Equities estimates overall OEM revenues to grow around 17–19 per cent year-on-year, with Ebitda rising around 26 per cent year-on-year (ex-Tata Motors), led by operating leverage and mix. On the cost side, the narrative turns more cautious. Motilal Oswal highlights that input cost inflation has picked up sharply in Q4, though the full impact is likely to be visible from Q1FY27 due to lagged contracts. It estimates Ebitda margins for OEMs (ex-Tata Motors PV) to decline around 20 basis points year-on-year to around 14.1 per cent, despite strong volumes, indicating that operating leverage is being partly offset by rising raw material costs. Kotak also flags pressure on gross margins due to elevated precious and base metal prices, even as Ebitda margins expand modestly due to mix and scale benefits. Ancillaries, however, are relatively better placed. Motilal Oswal expects around 14 per cent revenue growth and around 20 per cent Ebitda growth for auto ancillaries, while Centrum is more optimistic with around 40.7 per cent Ebitda growth, aided by operating leverage and improved mix. Margin expansion for tyre companies and select component makers is driven by prior low base and mix benefits, although rising rubber and crude prices are expected to reverse gains from Q1FY27 onwards. Overall, while Q4FY26 is shaping up to be a strong volume-led quarter with double-digit revenue and Ebitda growth, brokerages are increasingly flagging that margin tailwinds are peaking, with commodity inflation, higher freight, and geopolitical risks likely to weigh on profitability in the coming quarters. ### Related Stocks - [7203.JP](https://longbridge.com/en/quote/7203.JP.md) - [7269.JP](https://longbridge.com/en/quote/7269.JP.md) - [TM.US](https://longbridge.com/en/quote/TM.US.md) - [SZKMY.US](https://longbridge.com/en/quote/SZKMY.US.md) - [TMH.US](https://longbridge.com/en/quote/TMH.US.md) ## Related News & Research - [Toyota sales fall for second month in March on Middle East slump, RAV4 model change](https://longbridge.com/en/news/284152468.md) - [04:00 ETHankook Demonstrates Strong Performance in Extreme Conditions at WRC Rally Islas Canarias 2026](https://longbridge.com/en/news/284337192.md) - [Toyota Hydrogen Solutions Achieves Key Certifications for Commercial Fuel Cell Units | TM Stock News](https://longbridge.com/en/news/284565822.md) - [Toyota’s EV sales rise 139% in March as drivers seek relief from surging gas prices](https://longbridge.com/en/news/284247485.md) - [The First Toyota Plant to Go Carbon Neutral: “One Tahara”](https://longbridge.com/en/news/284859071.md)