India's auto stocks to face earnings pressure as Iran war drives up costs, says J.P.Morgan

TVS Motor

09/04/2026 06:32

** Indian auto industry is likely to be hurt by commodity inflation due to Iran war even if the risk of production disruptions seems to be abating, says J.P.Morgan

** The Nifty auto index .NIFTYAUTO  down 9% since the start of the Iran war, underperforming the benchmark Nifty 50's .NSEI 6% drop

** J.P.Morgan cuts fiscal year 2027 earnings estimates by 2%-16% across its coverage in auto sector

** Brokerage says that commodity costs for Indian auto companies has risen 15%-20% due to the conflict, which will necessitate price hikes of 2.5%-5% across the sector

** "The bulk of this hit would be felt in the ongoing June quarter," says J.P.Morgan, adding that it expects mid/high single digit volume growth across segments, except tractors, in FY2027 and FY2028

** Upgrades TVS Motor TVSM.NS to "overweight" from "neutral", Escorts Kubota ESCO.NS to "neutral" from "underweight"

** Downgrades Apollo Tyres APLO.NS to "neutral" from "overweight"

** TVSM, ESCO up 0.25% and 2%; APLO down 1%

(Reporting by Bharath Rajeswaran in Bengaluru)

((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))