India’s auto industry posted a record 2.83 crore vehicles in FY26, with SUVs and UVs making up 65% of passenger vehicle volumes. EV penetration has crossed 9% in two-wheelers, signaling a structural shift in consumer demand. Auto exports surged 24% YoY, driven by motorcycles and precision components, positioning India as a global supply-chain hub.
Key Stocks to Watch
Maruti Suzuki With a 17.7% weightage in NIFTY Auto, Maruti remains the largest player. Analysts expect a 17% upside, supported by strong SUV launches and premiumization trends.
Mahindra & Mahindra Holding 16.7% index weightage, M&M leads SUV sales and has a robust EV pipeline. Analysts project a 32% upside, making it one of the most attractive picks.
Bajaj Auto With 12.5% weightage, Bajaj Auto benefits from strong export demand and premium motorcycle sales. Upside potential stands at 5.8%, with steady earnings growth.
Hero MotoCorp Despite margin pressures, Hero MotoCorp offers 19% upside as rural demand stabilizes and EV initiatives gain traction.
TVS Motor With 8% index weightage, TVS Motor is a strong performer in two-wheelers, backed by EV adoption. Analysts see 12% upside in the near term.
Market Outlook
The NIFTY Auto index gained 19.4% over the past year, reflecting investor confidence in premiumization, EV adoption, and export growth. Risks remain in the form of ICE component shrinkage as EV penetration rises, which could pressure traditional ancillary players. However, diversified OEMs like M&M, Maruti, and Bajaj Auto are well-positioned to capture growth
