Festive auto demand strong, but rising input costs may squeeze margins: Kotak

Indias automobile sector is heading into the festive season with strong demand momentum but rising raw material costs could put pressure on manufacturers profitability despite higher vehicle sales claimed a report by Kotak Institutional Equities In its automobile and components sector earnings preview Kotak said strong retail demand following GST cuts has supported vehicle production across passenger vehicles two-wheelers and commercial vehicles However higher steel rubber and crude-linked costs are expected to weigh on operating margins