J.P. Morgan: Iran War Raises Costs, Indian Auto Stocks Face Profit Pressure

JPMorgan Chase has stated that, despite the risk of production disruptions appearing to decrease, the Indian automobile industry may still be impacted by commodity inflation triggered by the Iran war. Since the beginning of the Iran war, the Nifty Auto Index has dropped by 9%, underperforming the benchmark Nifty 50 Index which fell by 6%. JPMorgan Chase has lowered its earnings forecasts for the automobile industry it covers for the fiscal year 2027 by 2%-16%. The organization stated that due to the conflict, raw material costs for Indian automobile companies have increased by 15%-20%, which will lead to a 2.5%-5% industry-wide price hike. JPMorgan Chase pointed out that "most of the impact will be seen in the current June quarter," and added that sales growth in the mid-to-high single digits is expected for each segment market except for tractors in the fiscal years 2027 and 2028.