Auto Component - Covid 2.0 To Result In Over 70% QoQ Decline In Industry Ebitda During Q1 FY22: ICRA
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ICRA Research Report
In line with the swift recovery in automobile demand in H2 FY2021, earnings of auto component manufacturers also started improving.
Most auto component suppliers registered their highest ever revenues during Q4 FY2021.
The recent disruption caused by Covid 2.0 is likely to derail the momentum owing to disruption in operations, primarily starting from May 2021.
The challenges for component manufacturers will be further compounded by the sharp increase in commodity prices, which are generally passed through to original equipment manufacturers with a lag of three to six months.
We estimate a revenue loss of 30%-40% QoQ, and this will translate into a sequential decline in Ebitda of over 70% during Q1 FY2022 for the industry.
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