According to CRISIL report, India’s auto sector may register a strong revenue growth of 22-24% in the first quarter of FY 2027. GST cut, healthy vehicle sales and rising exports have been cited as the main reasons for this growth.
New Delhi [भारत]July 9 (ANI): According to a CRISIL report, India’s automobile sector is likely to register a strong revenue growth of 22-24 percent in Q1FY27. The sector will emerge as one of the largest contributors to overall corporate revenue growth during the quarter.
The report estimates overall corporate revenues to grow by 11-11.5 per cent year-on-year in the quarter ending June 30, 2026. This is the fastest pace in two years despite supply chain disruptions and higher input costs stemming from the Middle East conflict. In comparison, revenue growth in the previous quarter was 9.6 percent.
Impact of GST cut and surge in sales
According to CRISIL, “Automobiles continued to be one of the strongest growth drivers.” This was supported by GST-led demand, good sales of passenger vehicles (PV), two-wheelers and commercial vehicles (CV), rising exports and selective price increases. “The 8-13 per cent reduction in GST rates boosted volume-led growth across the auto sector,” the report said.
Passenger vehicle (PV) retail sales grew by 25 per cent year-on-year, while commercial vehicle (CV) sales grew by 15 per cent. Meanwhile, automobile exports are expected to grow by 19-21 per cent, driven by strong demand from markets like Japan and Africa.
Cost and supply chain challenges
According to CRISIL, this growth was mainly driven by strong demand for automobiles and white goods, although earnings were pressured as the full impact of the West Asia conflict became visible during the quarter. It further said that the inventory buffer in the fourth quarter of the last financial year had helped mitigate the immediate impact of higher input costs.
“Buffer stocks directly mitigated the impact in the fourth quarter of the last fiscal year,” the report said. “India’s auto sector revenues are estimated to grow 22-24% year-on-year, supported by GST-led demand momentum, healthy passenger vehicle and two-wheeler sales, demand for commercial vehicles, export growth and selective price increases,” CRISIL said.
Apart from the auto sector, automobile and white goods benefited from GST rationalization, while the power sector was supported by peak power demand, and telecom services benefited from a shift towards premium services and better data monetization. (ANI)
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