New Delhi, Feb. 4 -- For Indian automakers, a surge in sales after the September tax cut has been eclipsed by a new concern: soaring raw material costs. Many are contemplating price increases at the risk of suppressing demand.

Since the third quarter earnings season kicked off, the nation's largest carmakers Maruti Suzuki India Ltd and Hyundai Motor India Ltd, commercial vehicles maker Tata Motors Ltd, two-wheeler manufacturers TVS Motor Co., Bajaj Auto Ltd, and electric scooter maker Ather Energy Ltd flagged rising prices of key inputs such as steel, aluminium and copper. Combined with a depreciating rupee, it is weighing on their profitability.

"I don't think anybody knows what's happening," Tarun Mehta, co-founder and chief executive...