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Passenger Vehicles volumes seeing a quicker recovery: Volumes across the passenger vehicle segment are seeing a quicker recovery than two-wheeler and commercial vehicle segments post the 2nd phase of lockdown.
The industry should see double-digit volume growth as the favourable base will continue till Q2 FY22.
We expect companies with exposure to PVs and tractors to outperform the companies with exposure to CVs and 2Ws.
Further, OEMs are likely to see gross margin contraction quarter-on-quarter due to raw material inflation as commodities have continued their upward trajectory, though it will be partially offset by price hikes.
For ancillaries, any impact of the lag in commodity price pass-through could hurt operating margin (utilisation levels at sub 65% for the quarter).
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