Semi-conductor crunch, high input costs to crimp Q2 show for auto sector

Though weak domestic demand is set to crimp earnings of two wheeler-manufacturers, strong exports are expected to offset this to some extent

Automakers are expected to report muted earnings for the second quarter of financial year 2021-22 (Q2FY22) because of supply-side constraints like the shortage of semiconductors, brokerages say.

The average estimates of brokerages Motilal Oswal, YES Securities, IDBI Capital, and Phillip Capital show that while supply constraints weighed on passenger vehicle (PV) volumes, tepid domestic demand kept two-wheeler sales in check.

As a result, the firms in the auto universe among the Nifty50 companies (including Tata Motors consolidated) are expected to swing to a year-on-year (YoY) loss of Rs 399 crore, against a cumulative profit of Rs 4,395 crore last year.