The festive season could be the next big test for India's auto sector — and CLSA is already placing its bets. With retail registrations gaining across every major auto segment in the first half of August, the brokerage sees enough momentum to stay constructive, with M&M, Tata Motors Passenger Vehicles, Bajaj Auto and Ather Energy emerging as its top picks.
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CLSA analysts Basudeb Banerjee and Rishi Kapadia, in their latest auto sector pulse check, said retail registrations remained “healthy” in August. With the festive season approaching, the brokerage expects demand momentum to strengthen further.
Two-Wheelers: TVS, Royal Enfield Steal Share
The two-wheeler market is already showing signs of a shift in the competitive pecking order. Industry registrations rose 16% YoY in the first 15 days of August, with TVS Motor gaining 111 bps of market share and Royal Enfield adding 44 bps.
Hero MotoCorp and Bajaj Auto, on the other hand, lost 57 bps and 28 bps, respectively. Yet CLSA continues to prefer Bajaj Auto, expecting its share to recover on the back of a favourable base, model refreshes and a new 125cc launch.
Electric two-wheeler penetration remained at 10%. TVS led with a 29% share, followed by Bajaj Auto at 22% and Ather at 17%. CLSA said Ather demand remains robust, although “capacity bottlenecks” are restricting its ability to capture more of the market.
Tata Motors Finds More Traction In PVs
Passenger vehicles are also entering the festive period with a positive backdrop. Registrations rose 4% YoY in the first half of August, with Tata Motors Passenger Vehicles gaining 89 bps of market share.
Maruti Suzuki added 48 bps, while Hyundai Motor India lost 118 bps. CLSA expects Hyundai's market-share trajectory to improve from the second half of FY27 as upcoming launches start contributing.
In EVs, Tata Motors remained firmly ahead, accounting for 36% of the passenger vehicle EV market, followed by M&M at 23%. Overall PV EV penetration stood at 8%.
CVs, Tractors Add To The Momentum
The improvement is not limited to cars and two-wheelers. Commercial vehicle registrations rose 5% YoY, while tractor registrations jumped 14% in the first half of August.
CLSA said Ashok Leyland and Tata Motors Passenger Vehicles have highlighted “strong momentum” following the GST rate cut. The brokerage expects 8% FY27 growth in M&HCV goods volumes.
Tractor wholesale volumes have also grown around 20% year-to-date in FY27, reinforcing the strength in retail registrations.
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