Auto sector to grow at 22-24% in Q1 FY27, among top drivers of corporate growth: Crisil
New Delhi, July 9
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.
"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.
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.
— ANI
Reader Comments
Crisil's numbers look promising, but let's not forget the ground reality. My uncle runs a small auto dealership in Pune and says sales are up only 10-12%, not 22%. Also, the rental yields for commercial vehicles haven't improved much. These aggregate figures often hide regional disparities.
Great to see two-wheeler sales picking up! As a daily commuter in Bangalore traffic, I rely on my bike. But the GST reduction should have been more aggressive for entry-level vehicles. Many lower-middle-class families still can't afford even a basic car or scooter. The government needs to ensure inclusive growth, not just headline numbers. 🇮🇳
The export growth to Japan and Africa is interesting. India is becoming a global auto hub! But with West Asia tensions, can we sustain this? Also, the inventory buffer they mention - is that sufficient? Or are manufacturers just delaying the price hike? Would love more transparency from Crisil on input cost impact.
From a global perspective, India's 22-24% auto growth is phenomenal. Back home in the US, we're seeing only 5-7%. The GST rationalization seems to have worked better than expected. But one concern: the 25% PV retail growth might lead to congestion in cities without parallel infrastructure investment. Just a thought.
While I celebrate the growth, let's also think about sustainability. 22-24% growth means more vehicles on Indian roads, more pollution. The report doesn't mention EV penetration. Are we growing in the right direction? The GST cuts helped ICE vehicles more than EVs. We need
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.