Mahindra & Mahindra Ltd. and TVS Motor Co. are Macquarie's top picks as the brokerage updated its ratings and target prices for several stocks in the auto sector.
Bajaj Auto Ltd. and Eicher Motors Ltd. have been downgraded.
Macquarie sees tractors and two-wheelers leading growth in FY26, while passenger vehicle and commercial vehicle growth is expected to remain relatively muted. Entry segment demand will continue to lag segment growth, and battery electric vehicle penetration should improve, driven by new model launches, it said. Supply issues are identified as a key downside risk.
Stock Target Prices
Ashok Leyland Ltd.: Maintained 'neutral'; hiked target price to Rs 243 from Rs 234.
Bajaj Auto Ltd.: Retained 'neutral' rating with target price of Rs 8,811.
Eicher Motors Ltd.: Maintained 'neutral'; target price raised to Rs 5,242 from Rs 5,156.
Hero MotoCorp Ltd.: Maintained 'neutral'; hiked target price to Rs 4,547 from Rs 4,437.
Escorts: Maintained 'outperform'; cut target price to Rs 3,634 from Rs 3,814.
Hyundai Motor India Ltd.: Retained 'outperform'; hiked target price to Rs 2,162 from Rs 2,100.
Tata Motors Ltd.: Maintained 'outperform'; cut target price to Rs 753 from Rs 826.
Uno Minda Ltd.: Maintained 'outperform'; target price raised to Rs 1,214 from Rs 1,157.
TVS Motors Ltd.: Maintained 'outperform'; hiked target price to Rs 3,106 from Rs 3,045.
Mahindra and Mahindra Ltd.: Kept 'outperform' rating with target price of Rs 3,536.
Maruti Suzuki India Ltd.: Maintained 'outperform' rating with target price of Rs 13,682.
The brokerage expects improved rural sentiment and low base to support two-wheeler and tractor demand, while passenger vehicle volumes will remain lacklustre. "Battery electric vehicle launches by leading OEMs provide customers with model options, while partly addressing charging infrastructure issues. The key risk is supply disruption led by rare earth element availability," Macquarie said.
Entry segment growth continues to lag, with launches of SUVs priced competitively, versus premium hatchbacks and a consumer shift towards 125cc motorcycles, according to the brokerage.
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