CV volumes to stay resilient as demand recovery takes hold in FY23

Margin pressures may continue on competitive pressures, input cost inflation

Medium and heavy commercial vehicle (M&HCV) makers were the worst impacted in the auto space in the June (Q1FY23) quarter due to a spike in raw material costs and moderating volumes. The sequential margin drop for commercial vehicle players was a steep 290 basis points. In comparison, margin compression was limited to 40 basis points for two wheeler companies and 80 basis points for passenger vehicle makers. The decline in margins for CV makers was due to weak seasonal volumes, points out Mansi Lal of Prabhudas Lilladher Research.

While sequential volumes of passenger vehicle companies were flat and those for two-wheelers