Auto companies had seen a revival in demand for 4-wheelers in the festival season in Q3FY26, thanks to GST cuts and lower interest rates on auto loans. Investors on Dalal Street were eager to understand if the momentum had continued in the March 2026 quarter at a time when the Iran-USA / Israel war has created considerable consumer uncertainties amidst reports of shortage of petroleum products.
Another cause for concern for investors is the rising costs of inputs, like steel and aluminium in the fourth quarter of FY26, and the ability of leading auto makers to offset this cost pressure.
Growth in volumes in the March 2026 quarter
| Company | % change (y-o-y) |
| Mahindra & Mahindra (auto division) | 21% |
| Tata Motors Passenger Vehicles | 37% |
| Maruti Suzuki India | 11.8% |
| Hyundai Motor India | 8.7% |
M&M – recently launched SUVs drive 21% growth
Mahindra & Mahindra (M&M) has shown strong growth in Q4FY26, and that was once again thanks to strong demand for its SUV product portfolio. Its total auto sales (SUVs, LCVs and three-wheelers) grew by nearly 21% y-o-y to 301,455 unitsin the March 2026 quarter, and that was powered by its SUV sales that grew by a whopping 23.3% y-o-y to 183, 800 units in the quarter under review.
The Mumbai-based player has highlighted strong demand for its SUV models like XUV7XO that was launched in early January 2026, Thar and Thar Roxx, Bolero (diesel) and its electric SUVs like BE 6 and XEV 9E in the March 2026 quarter.
In the December 2025 quarter too, M&M had benefited from its SUV sales that jumped 26% y-o-y to 179,000 vehicles, and that was led by strong demand for its recently launched electric models like BE 6 and XEV 9E. Its total auto sales rose 23.2% y-o-y to 298,902 units in the December 2025 quarter.
Tata Motors Passenger Vehicles – electric vehicles drive 37% y-o-y surge in sales
Tata Motors Passenger Vehicles, the recently listed Tata Group company, benefited from its highest ever EV sales in Q4FY26 for models like Nexon and Punch. EV sales volume came in at 27,000 units in the quarter under review, a jump of 69% y-o-y.
Its total vehicle sales also jumped 37% y-o-y to 201,368 units in Q4FY26, helped by strong demand for its recently launched petrol version of Harrier and Safari models.
In Q3FY26, the company’s vehicle sales of 171,000 in Q3FY26, grew 22% y-o-y.
No doubt at its smaller Indian operations the company has shown strong vehicle sales growth in Q4FY26, however, investors are keenly waiting for signs of a turnaround at its key UK-based Jaguar and Land Rover (JLR) operations. JLR’s performance was affected by a cyber incident in the December 2025 quarter.
Maruti Suzuki India – exports buoyant however, sluggish sales in small car segment
Maruti Suzuki grew its total sales volumes by 11.8% y-o-y to 676,209 units in the March 2026 quarter, and that was thanks to its export sales that jumped nearly 61.2% y-o-y to 137,215 units in the quarter under review.
The government had reduced the GST to 18% for engines with a capacity up to 1,200 cc and there had been a revival in small car sales in Q3FY26.
However, in the March 2026 quarter, sales of small cars like Alto, WagonR and Celerio, fell nearly 4% y-o-y to 247,160 units. It does appear that consumers in the middle class appear to be cautious amidst the Middle East tension and its impact on the Indian economy.
Investors will be closely monitoring sales in the small car segment since they accounted for nearly 36.6% of total March 2026 quarter vehicle sales.
Hyundai Motor India – exports remain growth driver
Meanwhile, the Gurugram-based Hyundai Motor India Limited (HMIL) grew its total sales by 8.7% y-o-y to 2,08,275 units in the March 2026 quarter, and that was once again thanks to its export sales that grew by 9.4% y-o-y to 41,697 units in the quarter under review.
A similar trend was also witnessed in the December 2025 quarter where its vehicle sales grew 4.8% y-o-y to 1.95 lakh units in the quarter under review, driven by exports that grew 21% y-o-y to 48,888 units in the said quarter.
And in the March 2026 quarter, this auto maker in the domestic market achieved its highest ever quarterly sales of 1,66,578 units, a rise of 8.5% y-o-y. The Gurugram-based player benefited from strong demand for its upgraded models launched in March 2026, Hyundai Verna and Hyundai Exter.
Raw material cost pressure and impact on operating profit margins of auto companies
The average price of aluminium on the LME has risen nearly 20% y-o-y to $3,200 per tonne levels in the March 2026 quarter. Also, steel prices for auto companies have risen by nearly 10% y-o-y in Q4FY26. Several auto makers like Maruti Suzuki and Hyundai Motor India have planned a price hike of up to 2% from early April 2026 to deal with rising cost pressures.
Auto makers had also hiked prices ranging between 0.5% to 2% in early January 2026 offset rising input costs.
Earlier, rising input costs and a one-time hit related to the new labour code had affected operating profit margins for auto makers in the December 2025 quarter – for instance Maruti Suzuki’s standalone operating profit margin shrank 170 basis points y-o-y to 11% in Q3FY26.
Meanwhile, M&M’s standalone operating profit margin were broadly flat at 14.7% in the third quarter of FY26.
Investors on Dalal Street
Strong sales helped the Mahindra & Mahindra stock rise 2.5% in Wednesday trading to Rs 3,029. The stock had reached a 52-week high of Rs 3,840 on 5 January, 2026.
The recently listed Tata Motors Passenger Vehicles also gained 2.4% to Rs 303.4 in Wednesday trade.
Maruti Suzuki India also gained 1.6% to Rs 12,500 on Wednesday. The stock had reached a 52-week high of Rs 17,371 on 5 January, 2026.
However, Hyundai Motor India fell 3.2% to Rs 1,720.5 in Wednesday trading, with investors showing signs of disappointment in the sales volume figures announced for Q4FY26.
P/E Comparison – Tata Motors Passenger Vehicles offers reasonable valuations
Valuation advantage for Tata Motors Passenger Vehicles
| Company | P/E |
| Mahindra & Mahindra (Standalone) | 24.5 |
| Tata Motors Passenger Vehicles (Consolidated) | 18.6 |
| Maruti Suzuki India (Standalone) | 26.7 |
| Hyundai Motor India (Consolidated) | 23.9 |
M&M trades at a standalone P/E of 24.5, according to Screener.in, while Maruti Suzuki trades at 26.7.
Hyundai Motor India trades at a consolidated P/E of 23.9, and Tata Motors Passenger Vehicles trades on a consolidated basis at 18.6.
Tata Motors Passenger Vehicles trades at valuations lower than peers and that’s because investors are waiting to understand the turnaround at its key UK operations in the March 2026 quarter.
Investors could add these auto stocks to their watch list of stocks for 2026, and analyse if the performance matches expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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