Ashok Leyland, Ather Energy, Bharat Forge — HDFC Securities Top Stock Pick In Auto Sector; Q1 Results Preview

A key surprise impact on margins could come on key export companies, especially Balkrishna Industries, from ocean freight costs that saw a spike, adds the brokerage.

Higher raw material costs, especially steel and platinum group metals, to impact gross margins of OEMs.

(Photo by Lenny Kuhne on Unsplash)

Softer demand both domestically and globally continues to impact volume growth. Key exceptions to this are TVS Motor, Eicher Motors, and Mahindra and Mahindra. While TVS Motors is riding on the back of its successful models and variants, including the EVs, it has also been expanding its geographic footprint, thus adding further legs to its growth.

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HDFC Securities Institutional Equities

Our top pick is Ather Energy (though we are watchful of the magnet shortage) and Ashok Leyland due to a strong structural growth story over the medium to long term that increases the re-rating potential.

From the ancillary space, our top pick is Bharat Forge on the back of strong defence segment potential, especially after the India-Pakistan conflict, which would increase the potential requirement of ATAGs, as well as long term structural shift in the forging segment from a high cost base like Europe to India

Click on the attachment to read the full report:

HDFC Securities Institutional Equities Autos - Q1FY26 Results Preview.pdf
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Also Read: Eternal, Swiggy, Nykaa, Delhivery, Matrimony, IndiaMart, Blackbuck & More Q1 Results Preview— ICICI Securities

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