Bank of America Global Research reiterated Mahindra & Mahindra Ltd., Maruti Suzuki India Ltd., and Ashok Leyland Ltd. as its top picks in the auto space, even as its latest channel checks and Vahan registration data showed a mixed April for the industry.
While passenger vehicles continued to post modest growth, two-wheelers remained stuck in a rut and commercial vehicles showed early signs of recovery. BofA flagged that a strong promotional push is helping PV volumes, premium segments are keeping two-wheeler brands alive, and lower crude prices and likely rate cuts could support CVs going ahead.
Two-Wheelers: Eicher, TVS Pace Ahead
Two-wheeler retails posted a mild year-on-year decline over March-April combined, despite street hopes for 7–8% industry growth in financial year 2026. Financing challenges and a tough base continue to weigh on the segment, BofA said.
The few bright spots? Scooters and premium bikes. TVS Motor and Eicher Motors Ltd. clocked market share gains here, and Eicher is likely to have printed 1 lakh units again in April.
However, BofA warned that margin delivery in the March quarter will be critical to drive any earnings upgrades and stock outperformance for both TVS and Eicher.
Among others, Hero MotoCorp Ltd. saw some seasonal support from wedding and festive demand, but Bajaj Auto Ltd. continued to lose market share.
On the electric side, the picture darkened: EV adoption dropped to just 5% in April, falling 35% month-on-month after subsidy cuts. Bajaj Auto, TVS, and Ola Electric Mobility Ltd. are still battling it out at the top of the e-scooter charts.
PV's: Mahindra, Maruti Hold Firm; Tata Motors Lags
Passenger vehicle sales stayed in modest growth territory, rising 2–3% year-on-year for March-April combined. BofA expects industry volume growth in financial year 2026 to be just 1–2%, if no new income tax benefits kick in.
Maruti Suzuki benefited from festive tailwinds in Navratri, while Mahindra & Mahindra Ltd. continued to gain share, helped by new battery electric vehicle model deliveries. In contrast, Tata Motors Ltd. lagged behind on market share.
Electric vehicle adoption remains steady at around 3.5%, with Mahindra gaining share, the brokerage said. All eyes are now on Maruti's e-Vitara launch in the coming months.
Commercial Vehicles: Ashok Leyland In Focus
Commercial vehicles are finally showing some life, with medium and heavy commercial vehicle registrations ticking up by 696 units year-on-year in April, supporting BofA's thesis that the industry has bottomed out. Lower diesel prices, steady truck rentals, and expectations of rate cuts are likely to provide further support.
In the farm segment, tractor sales continued to grow despite a high base, and a good monsoon forecast for financial year 2026 only adds to the optimism. Among stocks, Ashok Leyland Ltd. remains a key pick, with BofA citing a favourable operating environment and a slowly improving demand outlook.
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