“We believe the price hikes announced by automakers in January 2021 will not fully offset higher costs. We expect a quarter-on-quarter decline in volume from 3QFY21 on account of higher prices and a modest supply disruption due to a semiconductor shortage. Sustained high commodity prices imply the cost impact will be more visible in fourth quarter, they further noted. “The overall sales volume in 4QFY21 is likely to be somewhat lower than that in 3QFY21. This will negatively affect fixed-cost absorption despite automakers' cost-saving initiatives and result in lower operating margins.

Source: Mint February 11, 2021 13:52 UTC