Maruti Suzuki India emerged as the standout performer in Q1FY27 with 29.3% year-on-year growth in vehicle sales to 6.82 lakh units, according to The Financial Express. This exceptional performance was primarily driven by the company's recently commissioned second plant in Kharkhoda, Haryana, which enabled significant volume expansion. The company's SUV sales surged 44.6% for models including Grand Vitara, Invicto, Jimny, Victoris, while standalone revenue from operations grew 35.9% to ₹52,455.7 crore. The company's average realization per vehicle also rose 5.2% year-on-year to ₹7.68 lakh, demonstrating strong pricing power despite challenging market conditions. However, the company faced margin pressures as cost of materials consumed rose 420 basis points to 61% of standalone revenue, largely due to higher steel and copper prices.
Despite strong volume growth, operating profit margin shrank 380 basis points to 8.2% for Maruti Suzuki, while net profit declined 11% to ₹3,352 crore, as reported by The Financial Express. Mahindra & Mahindra experienced similar challenges with cost of materials rising 130 basis points to 73.2% of standalone revenue, resulting in operating profit margin declining 200 basis points to 12.2%. The company's net profit grew 6.8% to ₹3,685 crore due to lower tax burden. Hyundai Motor India faced the most severe impact with net profit declining 34% to ₹883.1 crore and operating profit margin falling 420 basis points to 9.1%. According to Screener.in, Maruti Suzuki's Return on Equity stood at 14.5%, while Mahindra & Mahindra achieved 23.1% and Hyundai Motor India led at 30.3%.
The automotive sector faced significant cost pressures in Q1FY27 due to the ongoing West Asia conflict, with commodity index spot prices surging 10-12% for two-wheelers and four-wheelers, and 13% increase for commercial vehicles and electric vehicles, as reported by Upstox. HSBC analysts noted that while passenger vehicle demand maintained strong momentum with PV volumes expected to grow 4-6% and two-wheeler volumes increasing 3-5%, supply challenges persist. The experts expect gradual margin recovery from Q2 FY27 onwards as input prices ease, with the sector positioned to deliver FY27 volume growth of approximately 8-12%. Saikat Kumar from Red Lions Capital emphasized that Indian automakers are expected to manage cost pressures through selective price hikes, greater localization, operating leverage, and richer product mix.
According to The Financial Express, Mahindra & Mahindra achieved 15% growth in four-wheeler sales and 23% growth in net sales, while Hyundai Motor India experienced a 1.3% decline in sales and flat revenue growth. The companies' Return on Equity varied significantly, with Hyundai leading at 30.3%, followed by Mahindra & Mahindra at 23.1% and Maruti Suzuki at 14.5%. Mahindra & Mahindra benefited from strong performance in both SUVs (15% growth to 1.74 lakh units) and tractors (18% growth to 1.58 lakh units), while Hyundai faced challenges from 19.6% decline in export sales and temporary production disruptions. The company's SUV model sales like Venue and Creta grew 7.6% to 97,456 units.
As reported by The Financial Express, Maruti Suzuki has announced price hikes of up to ₹30,000 per vehicle across its range to combat rising input costs. The company is expected to see full benefit of its Kharkhoda plant during FY27, with SUV sales momentum continuing from Q1FY27. Mahindra & Mahindra has planned launches including Scorpio N facelift and BE.05 electric SUV, while Hyundai will launch Creta Electric and new variants. Looking ahead, investors will monitor festive season demand and raw material price trends, with the festive season approaching expected to provide insights into vehicle premiumisation trends. The company trades at a standalone P/E of 31.9 times, having traded between 26.5 times and 85.3 times over the past 5 years.
