Brokerages Pick Top Auto Stocks
Brokerages are seeing Mahindra & Mahindra (M&M) and TVS Motor Company as top investments in India's auto sector. This follows a strong March where retail sales jumped 26%. Major firms like Morgan Stanley, Macquarie, and Citi have issued 'buy' ratings. They aim to guide investors through fiscal year 2027, a period that could bring global unrest and rising material costs.
M&M Leads the Pack
M&M is a favored stock. The company saw passenger vehicle sales climb 25% to 60,272 units. Its tractor division showed the strongest performance in the sector, growing 29%. Macquarie and Morgan Stanley specifically pointed to M&M's growing share in tractors and a strong comeback in its commercial vehicle sales as reasons for their positive view.
TVS Motor Bets on Electric
TVS Motor Company is a top pick for investors looking at the shift to electric vehicles. Total sales rose 25% in March, surpassing 500,000 units. Its electric two-wheeler (E2W) segment saw strong growth. TVS Motor now holds a 25.9% share of the E2W market, according to Morgan Stanley, with segment use rising nearly 10% that month.
Maruti Suzuki Eyed for Recovery
For investors looking for a recovery opportunity, Citi and Morgan Stanley remain positive on Maruti Suzuki India Ltd., the country's largest car maker. Maruti Suzuki's March sales grew 17% to 225,000 units, beating market forecasts. Citi ranked Maruti Suzuki highest on its preferred list, even over M&M.
Global Risks and Costs Cloud Outlook
These recommendations come with important warnings, especially due to global tensions. Jefferies and Citi have warned about possible disruptions to gas and chip supplies as the new fiscal year starts. Pressure on profit margins and a large share of overseas orders coming from the Middle East for some companies mean investors should focus on companies that can raise prices to manage volatile energy costs.