* Results reporting starts April 25 for Jan-March earnings
* Korean, Indian car makers feel little impact from Japan parts squeeze
* Hyundai to gain market share from Japanese rivals
* Indian auto margins expected to weather rising input costs
By Neha Singh and Hyunjoo Jin
MUMBAI/SEOUL, April 21 (Reuters) - Indian and South Korean car makers are on track to post solid growth in revenues for the January-March period, driven by strong volume and demand and because they have emerged little scathed by the supply disruption caused by the Japan earthquake in March.
South Korea's Hyundai Motor and its affiliate, Kia Motors , are expected to post strong results for the January to March period driven by new models.
Indian auto makers, however, will see pressure on operating margins as commodity prices continue to rise.
The rising costs of steel, rubber and other inputs have forced some Indian car makers to raise prices in recent months.
India's largest car maker, Maruti Suzuki , has raised prices twice this year, while utility-vehicle maker Mahindra & Mahindra and Tata Motors have raised prices by up to 2 percent on key models.
"Though OEMs continue to face input cost pressure, price hikes coupled with strong volume growth should help to largely offset input cost pressures," said Ajay Shethiya, an auto analyst with Centrum Broking.
Maruti, 54.2 percent owned by Japan's Suzuki Motor Co , is expected to report an 8 percent fall in quarterly net profit and is facing pressure from competitors such as Hyundai Motors, the second-largest car maker in India.
Shethiya expects the car maker to register an EBITDA margin of 9.7 percent in the quarter, down 349 basis points compared with the same period a year ago.
Tata Motors, which produces everything from the premium Jaguar and Land Rover brands to the Nano, the world's cheapest car, is expected to report 15 percent growth in net profit. The increase is supported by higher sales at its Jaguar and Land Rover unit, which it bought from Ford Motor Co in 2008.
Auto sales in India grew a record 30 percent in 2010-2001 to 1.98 million units, but rising interest rates could dent consumer spending in the short term, leading to a crimp in demand. India's central bank has raised interest rates eight times since March 2010.
HYUNDAI, KIA TO GRAB MARKET SHARE
Hyundai and Kia are expected to outperforming the global market in the January to March period after Japanese rivals suffered supply disruptions as a result of the March 11 earthquake and tsunami.
Analysts expect the two car makers, which combined rank fifth in global car sales, to gain market share from Japanese rivals in the April to June quarter.
"For Hyundai and Kia, the second quarter will be better than the first quarter," said Suh Sung-moon, an analyst at Korea Investment & Securities. "Their market share gains will pick up momentum as their rivals see parts inventory dry up from late April."
South Korean car makers outperformed the market and gained market share during the global financial crisis, helped by their improved brand image and product quality.
The weak South Korean won also helped them gain an edge against Japanese rivals, which have struggled with a strong yen and several recalls.
Shares in Hyundai and Kia rallied after Japan's earthquake, on expectations they would benefit from production loss at Japanese rivals. Hyundai shares have surged 29.5 percent in the past month, outperforming the wider market's 9.5 percent gain. Shares in Kia also surged 25.9 percent.
"I see ample room for additional shares price rises for Hyundai Motor and Kia Motors," said Shin Ji-ho, a fund manager at Midas Asset Management in Seoul, which owns shares of Hyundai and Kia . "Hyundai and Kia expect to post strong quarterly profits in the first quarter despite low seasonal demand. They will benefit a lot from Japan's quake and continue to post good earnings in the second and third quarters."
Hyundai is expected to post a net profit of 1.33 trillion won ($1.2 billion), according to a Reuters poll of 11 brokerages, while Kia's profit is seen at 659.5 billion won.
LITTLE IMPACT FROM JAPAN
South Korean and Indian car makers will see little to no impact from Japan's supply disruption, although uncertainty remains for the longer term, analysts say.
"Along with solid demand in major markets such as the United States, Hyundai's utilisation rate was high because it was little affected by Japan's earthquake," said Angela Hong, an analyst at HSBC.
"Hyundai will enjoy higher market share and lower incentive in the second quarter when the impact of Japan's March 11 earthquake will be fully reflected," she said.
Japanese auto makers suspended work at most factories after the March 11 earthquake, which devastated the northeast of Japan, disrupted their parts supply chains and triggered power outages and an ongoing nuclear crisis.
Toyota Motor Corp and other top auto makers have resumed production in Japan at all domestic factories in stages since April 11, but output levels will be half of original plans. [ID:nL3E7F81GD]
(1 won = $0.000924) The following table includes net profit and sales forecasts from a Reuters poll of brokerages: COMPANY NET PROFIT SALES NET PROFIT SALES
(bln rupees) % CHANGE/YR % CHANGE/YR
Maruti Suzuki 6.06 98.9 -8 +20 Tata Motors 25.6 345.3 +15 +214
(bln won) Hyundai 1,330 9,120 +18 +8 KIA 659.5 5,910 +65 +22 (Reporting by Neha Singh in MUMBAI and Hyunjoo Jin in SEOUL; Editing by Matt Driskill.)