Mapping the intersection of liquidity and profitability in Indian automobile industry: a panel data approach

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The nation’s thriving automobile industry is propelling the Indian economy forward. The industry has grown to become one of the most significant in India as well as the world, with millions of people employed and trillions of dollars generated in revenue. This study aims to investigate the impact of liquidity on the profitability of selected automobile companies in India. The statistics from April 2010 to March 2022 were examined employing panel data analysis. The top 10 Bombay Stock Exchange-listed auto manufacturing companies are picked as a sample based on market capitalisation in the financial year 2021–2022. The outcomes reported that the impact of liquidity on profitability in the automotive industry was insignificant during the study period. In all six models, dependent variables were not relevantly affected by explanatory variables, revealing that the explanatory variable was negatively associated with the dependent variables except earnings per share, and quick ratio was inversely associated with the dependent variable except gross profit and net profit ratio. © 2025 Elsevier B.V., All rights reserved.