Highlights
- Jefferies picks TVS Motor and Eicher Motors as its preferred Buy-rated auto stocks.
- Two-wheeler registrations surge 23% YoY in the first seven days of the festive season.
- Passenger vehicle sales growth lags at 7%, while tractor registrations jump 28% YoY.
Auto Stocks to Buy: Global brokerage Jefferies has identified TVS Motor and Eicher Motors as its preferred picks in the Indian automobile sector, citing strong two-wheeler demand during the ongoing festive season. The brokerage has expressed a preference for two-wheeler manufacturers over four-wheeler companies, with Mahindra & Mahindra following its two top picks.
In its October 18, 2026, research report titled Festive Starts Strong; 2Ws Outgrow PVs, Jefferies highlighted that two-wheeler registrations surged 23 per cent year-on-year during the first seven days of the festive season, significantly outperforming passenger vehicle registrations, which grew 7 per cent during the same period.
The brokerage noted that the strong two-wheeler demand came despite a high comparison base following the GST reduction in 2025.
According to the brokerage’s latest available price target history, included in its October 18 report, Jefferies has a target price of Rs 5,425 for TVS Motor.
For Eicher Motors, the brokerage’s latest recorded target price stands at Rs 9,300, assigned on July 29, 2026.
Meanwhile, Mahindra & Mahindra carries a target price of Rs 4,000, according to the brokerage’s May 5, 2026, recommendation.
Auto stock – Jefferies rating – Share price target
- TVS Motor Share Price Target 2026: Buy – Rs 5,425
- Eicher Motors Price Target 2026: Buy – Rs 9,300
- Mahindra & Mahindra Price Target 2026: Buy- Rs 4,000
Two-wheeler registrations jump 23% during festive season
According to Jefferies, the Indian two-wheeler industry has witnessed strong demand momentum during the initial phase of the month-long festive season, running from October 11 to November 11, 2026.
Two-wheeler registrations increased 23 per cent YoY between October 11 and October 17, compared with the corresponding festive period of September 22-28, 2025.
The brokerage highlighted that the growth came despite the high base created by the GST reduction in the previous year.
During the first half of FY27 (April–September), two-wheeler registrations grew 22 per cent YoY, while wholesale volumes increased 17 per cent.
Jefferies also noted that two-wheeler registrations recorded a compound annual growth rate of 17 per cent over the two-year period, compared with 10 per cent for passenger vehicles.
Passenger vehicle registrations rise 7%
Passenger vehicle registrations also recorded positive growth during the opening seven days of the festive season, although they lagged behind two-wheelers.
According to Jefferies, passenger vehicle registrations increased 7 per cent YoY during the period.
The brokerage noted that passenger vehicle registrations and wholesale volumes had grown approximately 28-29 per cent YoY during the first half of FY27.
On a two-year basis, passenger vehicle registrations recorded a CAGR of 10 per cent during the initial festive period, compared with 17 per cent for two-wheelers.
Trucks, tractors also witness strong festive demand
Apart from two-wheelers and passenger vehicles, Jefferies highlighted strong demand for trucks and tractors.
According to the brokerage, medium and heavy commercial vehicle truck registrations nearly doubled during the first seven days of the festive season, registering approximately 101 per cent YoY growth.
However, Jefferies noted that the sharp increase was partly supported by a favourable base, as truck registrations had declined 32 per cent YoY during the corresponding period last year.
On a two-year basis, truck registrations recorded a CAGR of 17 per cent.
Meanwhile, tractor registrations increased 28 per cent YoY during the initial festive period, compared with 18 per cent growth during the first half of FY27.
Despite the strong start, Jefferies flagged concerns over tractor demand during the second half of FY27, citing a high comparison base and weak monsoon conditions.
Why Jefferies prefers TVS Motor and Eicher Motors
Jefferies’ preference for TVS Motor and Eicher Motors comes amid stronger registration growth in the two-wheeler segment compared with passenger vehicles.
In its valuation commentary, the brokerage said it values TVS Motor at 40 times its September 2028 estimated earnings, compared with the company’s 10-year average price-to-earnings multiple of 36 times.
For Eicher Motors, the brokerage values the Royal Enfield business at 35 times FY28 estimated earnings and its commercial vehicle business at five times FY28 estimated price-to-book value.
However, Jefferies identified a prolonged slowdown in two-wheeler demand and weaker-than-expected Royal Enfield margins as key risks to its Eicher Motors valuation.
For TVS Motor, the brokerage highlighted risks including a prolonged downturn in domestic and export demand and lower-than-expected margin expansion.
Overall, Jefferies maintained its preference for two-wheeler manufacturers, led by TVS Motor and Eicher Motors, as early festive registration data indicated stronger growth in the segment than in passenger vehicles.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)