India's auto stocks to face earnings pressure as Iran war drives up costs, says J.P.Morgan

Indian auto industry is likely to be hurt by commodity inflation due to Iran war even if the risk of production disruptions seems to be abating, says J.P.Morgan

The Nifty auto index .NIFTYAUTO down 9% since the start of the Iran war, underperforming the benchmark Nifty 50's .NSEI 6% drop

J.P.Morgan cuts fiscal year 2027 earnings estimates by 2%-16% across its coverage in auto sector

Brokerage says that commodity costs for Indian auto companies has risen 15%-20% due to the conflict, which will necessitate price hikes of 2.5%-5% across the sector

"The bulk of this hit would be felt in the ongoing June quarter," says J.P.Morgan, adding that it expects mid/high single digit volume growth across segments, except tractors, in FY2027 and FY2028

Upgrades TVS Motor TVSM.NS to "overweight" from "neutral", Escorts Kubota ESCO.NS to "neutral" from "underweight"

Downgrades Apollo Tyres APLO.NS to "neutral" from "overweight"

TVSM, ESCO up 0.25% and 2%; APLO down 1%