Auto Sector Outlook: The Indian automobile sector has begun FY27 on a robust footing, with strong momentum across key segments. The two-wheeler, three-wheeler, and passenger vehicle categories have emerged as clear leaders, each recording impressive year-on-year growth of over 25 per cent.
This broad-based expansion has been driven by rising demand for SUVs, increasing EV adoption, improving rural sentiment, and sustained infrastructure and logistics activity. Exports have also contributed positively, according to a report by Nirmal Bang.
Meanwhile, other segments such as tractors, medium and heavy commercial vehicles (MHCVs), and light commercial vehicles (LCVs) have also registered a growth trend, though at a relatively moderate pace.
| Segment | YoY Performance Growth |
| Two-wheelers | 38% |
| Three-wheelers | 31% |
| Passenger vehicles | 26% |
| Tractors | 21.5% |
| MHCVs | 15% |
| LCVs | 9.5% |
Indian Auto Sector Outlook
On a quarter-on-quarter basis, growth in the aforementioned segments softened due to a high base in March. However, the outlook remains constructive. “Growth momentum is expected to sustain, supported by new launches, product upgrades, and favourable macro factors such as GST rationalisation and easing interest rates,” the report noted.
That said, geopolitical uncertainty leading to fuel cost volatility and rising input costs could pose near-term challenges for the sector.
Company-wise Performance
On the company-specific side, a strong year-on-year growth was witnessed across most automobile segments, led by standout performances in two-wheelers and select commercial vehicles.
| Company | Apr-26 Units | Growth (YoY %) |
| Bajaj Auto | 4,39,953 | 38.4 |
| TVS Motor | 4,55,333 | 5.9 |
| Hero MotoCorp | 5,66,086 | 85.4 |
| Eicher Motors | 1,13,164 | 30.7 |
| Maruti | 2,36,228 | 33.9 |
| Mahindra & Mahindra | 56,331 | 7.6 |
| Hyundai | 65,610 | 8.0 |
| Tata Motors | 59,701 | 31.1 |
| Maruti (LCV) | 3,418 | 2.1 |
| Ashok Leyland (LCV) | 6,344 | 16.2 |
| Tata Motors (LCV) | 12,799 | 40.2 |
| Mahindra & Mahindra (LCV) | 23,427 | 7.5 |
| Ashok Leyland (MHCV) | 8,302 | 4.3 |
| VECV (MHCV) | 7,318 | 6.9 |
| Tata Motors (MHCV) | 22,034 | 21.8 |
| Mahindra & Mahindra (Tractors) | 48,411 | 20.9 |
Hero MotoCorp recorded the highest growth at 85.4 per cent, followed by Bajaj Auto at 38.4 per cent and Eicher Motors at 30.7 per cent, reflecting robust demand in the two-wheeler space.
While Passenger vehicle makers like Maruti and Tata Motors also posted healthy gains of 33.9 per cent and 31.1 per cent, respectively.
In commercial vehicles, Tata Motors led MHCV growth at 21.8 per cent, while LCV growth was mixed but positive. Tractor sales by Mahindra & Mahindra grew 20.9 per cent, indicating improving rural demand.
Segment-wise Analysis
Two Wheelers: Demand remains robust and broad-based, with Hero MotoCorp anchoring volumes while TVS Motor and Bajaj Auto sustain momentum.
Auto Stock Recommendations
Based on the reported performance, the brokerage prefers M&M and Maruti in the passenger vehicle segment, and Eicher Motors and Hero MotoCorp in the two-wheeler space.
On the auto components side, ASK Automotive has been highlighted as the preferred pick among peers.
(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.)
