CLSA Warns of 30–40% Earnings Hit for Auto Stocks as Crude Surge and Middle East Disruptions Bite

India’s auto sector is facing mounting pressure from rising crude prices and supply-chain disruptions linked to the Middle East crisis, with CLSA warning of potential earnings downgrades and further downside risks. The Nifty Auto index has already declined about 15% over the past 20 days amid concerns over production disruptions and sharp inflation in commodity costs. CLSA said that if disruptions and elevated commodity prices persist for the next two to three months, FY27 earnings could see cuts of 30–40 percent. The brokerage said the key uncertainty is whether the impact remains limited to the near term or evolves into a broader earnings downgrade cycle. It noted that during the first Covid wave, auto OEM stocks corrected 30–45 percent over a 40-day period, indicating that a further 15 percent decline from current levels cannot be ruled out.