M&M, Eicher Motors & More — Nirmal Bang's Top Stock Picks In Auto, Auto Ancillary Pack; Q1 Results Preview

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Nirmal Bang Report

What to look for in Q1 FY26: Could the rare-earth disruption result in slowerthan-anticipated penetration of EVs, potentially benefitting OEMs who have a multi-drive train strategy? Demand outlook for rural, fiscal, and monetary expansionary policy resulting in improvement in vehicle financing penetration among the mass commuter segment and draft ABS regulation impact for 2two-wheeler original equipment manufacturers.

Q1 FY26 is expected to be a mixed bag for our coverage universe; we forecast a consolidated topline uptick of ~8%. Domestic deceleration persisted amid an export surge for the automobile industry in terms of volumes.

Margins are expected to taper for OEMs as prices of steel and other precious metals have seen an increase; however, scale should offset the increase in raw material.

Supply chain-related issues with regard to rare earths would be something to watch out for as multiple OEMs have guided for production cuts unless restrictions are lifted by China.

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