PV PRICE HIKES MAY NOT FULLY OFFSET MARGIN PRESSURE IN Q2

Passenger vehicle (PV) stocks have remained mixed over the past three months, with Maruti Suzuki India and Tata Motors’ passenger vehicle business among the key laggards. The underperformance comes as elevated commodity costs weighed on margins in Q1, despite healthy topline growth. With input costs continuing to rise, automakers have started increasing vehicle prices to partially offset the pressure. However, analysts expect the latest price hikes to provide only limited relief in Q2FY27. Maruti Suzuki India, Hyundai Motor India and Tata Motors’ passenger vehicle business have all announced fresh price increases, with the latest hikes taking effect in August and September. Maruti Suzuki implemented a weighted average price increase of around 0.5 percent across its model range from August 18, following a 0.4 percent hike in June. This takes the company's cumulative price increase in FY27 to around 0.9 percent. However, analysts noted that the hikes remain below the overall cost pressure faced by Maruti, estimating that the company experienced more than 3 percent cost pressure in Q1. Hyundai Motor India has announced a price increase of up to 1 percent, effective September. Tata Motors’ passenger vehicle division has also raised prices by up to ₹25,000 across its SUV and car portfolio. The company has indicated that it could face sequential cost pressure of around 300 basis points in Q2. Despite the margin headwinds, the demand outlook for the sector remains relatively positive. Wholesales across vehicle segments have recorded strong double-digit growth so far in FY27, supported by healthy retail demand and lean channel inventories.