Synopsis

India's automobile sector is expected to report robust revenue growth of 22-24 per cent year-on-year in the first quarter of FY27, emerging as one of the biggest contributors to overall corporate revenue growth during the quarter, according to a Crisil report.

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New Delhi: India's automobile sector is expected to report robust revenue growth of 22-24 per cent year-on-year in the first quarter of FY27, emerging as one of the biggest contributors to overall corporate revenue growth during the quarter, according to a Crisil report.

The report estimated overall corporate revenue to have grown 11-11.5 per cent year-on-year in the quarter ended June 30, 2026--the fastest pace in two years despite supply chain disruptions and higher input costs stemming from the West Asia conflict. This compares with revenue growth of 9.6 per cent in the preceding quarter.

According to Crisil, "automobiles remained one of the strongest growth drivers," supported by GST-led demand, healthy passenger vehicle (PV), two-wheeler and commercial vehicle (CV) sales, rising exports and selective price increases.

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"The 8-13 per cent reduction in GST rates fuelled volume-led growth across the auto sector," the report said.

Passenger vehicle (PV) retail sales rose 25 per cent year-on-year, while commercial vehicle (CV) sales grew 15 per cent. Meanwhile, automobile exports are estimated to have increased 19-21 per cent, aided by stronger demand from markets such as Japan and Africa.

As per Crisil, the growth was primarily driven by strong demand for automobiles and white goods, although earnings came under pressure as the full impact of the West Asia conflict began to reflect during the quarter. It further noted that inventory buffers had helped cushion the immediate impact of higher input costs in the fourth quarter of the previous fiscal. "Buffer stock cushioned the direct impact in the fourth quarter of the previous fiscal," it said.

Crisil notes, India's auto sector revenue is "estimated to have increased 22-24% on-year, supported by GST-led demand momentum, healthy passenger vehicle and two-wheeler sales, commercial vehicle demand, export growth and selective price increases," it said.

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Apart from auto sector, automobiles and white goods gained from GST rationalisation, while the power sector was supported by peak electricity demand, and telecom services benefited from premiumisation and improved data monetisation.