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Auto companies stare at muted earnings in Q3 amid high input costs

Chip shortage, poor two-wheeler demand and high input costs set to be spoilers

cars, auto sector
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Shally Seth Mohile Mumbai
It’s going to be a quarter of muted earnings for auto companies yet again.

While a persistent chip shortage dented sales of passenger vehicles, commercial vehicles and premium two wheelers, poor demand plagued the scooter and motorcycle makers during the quarter.

Moreover, higher raw material prices also hit earnings. Owing to a cyclical upturn and an underlying recovery in the commercial vehicles (CV) segment, those with exposure to CVs and three wheelers are set to benefit.

A Bloomberg poll of analysts expects average net profit at auto companies to contract by 42 per cent year-on-year (YoY) to Rs 5,041 crore.

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