Nuvama Institutional Equities is betting on Indian two-wheeler, passenger vehicle and tractor majors including Eicher Motors, TVS Motors, Maruti Suzuki and Mahindra & Mahindra to outperform, citing resilient domestic demand and product momentum, even as the global auto industry faces broad-based volume declines in 2025.
The brokerage has turned selectively bullish on Indian auto stocks, issuing ‘buy’ ratings for four two-wheeler manufacturers, Eicher Motors with a target price of Rs 6,200, TVS Motors at Rs 3,200, Bajaj Auto at Rs 10,700, and Hero MotoCorp at Rs 5,100, and naming them as key beneficiaries of “domestic strength, new launches and premiumisation tailwinds.” Nuvama said the two-wheeler export cycle has likely bottomed out and expects Bajaj and TVS to “lead the pack on volume growth.”
Nuvama also maintained a positive view on passenger vehicle major Maruti Suzuki, with a target price of Rs 13,400, and on tractor and utility vehicle maker Mahindra & Mahindra at Rs 3,700. Escorts Kubota was rated ‘buy’ at Rs 3,600. On the other hand, Tata Motors and Ashok Leyland were rated ‘reduce’ with target prices of Rs 670 and Rs 240, respectively, citing weak segments and freight-related structural shifts.
Auto component stocks also feature among the brokerage’s top picks. Motherson Wiring India was rated ‘buy’ with a target of Rs 83, Uno Minda at Rs 1,300 and Sona Comstar at Rs 560. In the tyre segment, Nuvama favours CEAT with a target of Rs 3,800 and Apollo Tyres at Rs 550.
“Domestic 2Ws and PVs continue to see tailwinds from demand and product refresh. Export-oriented names should gradually recover as overseas demand stabilises,” Nuvama said.
India a bright spot
Amid global pressures, the brokerage sees India’s auto landscape as relatively insulated. While global auto players face demand weakness, regulatory overhangs and soft freight markets, the Indian market is benefiting from steady farm incomes, infrastructure activity and improving consumer sentiment.
Nuvama expects India’s domestic tractor industry to grow in the mid-to-high single digits in FY26, supported by “good Rabi harvest cash flows, higher crop prices, above-normal monsoon expectation, and sufficient water levels in reservoirs.” Escorts expects export growth of 20–25% in the same period, while M&M is upbeat about demand in South India and Maharashtra.
Ashok Leyland sees growth across light, intermediate and heavy commercial vehicles in FY26. Tata Motors forecasts “single-digit growth,” supported by cargo HCVs and buses, although it flagged risks to high-tonnage trailer volumes from the shift to the Western Dedicated Freight Corridor.
Global outlook weak
In contrast to India’s resilience, Nuvama expects the global auto sector to remain subdued in 2025. “North America HCV volumes are likely to decline up to 16% and Europe HCV by up to 15%,” the brokerage said, citing economic uncertainty, weak freight demand and lack of prebuying amid unclear EPA27 regulations.
Construction equipment demand is expected to fall by up to 15% in North America and 10% in Europe, while tractor volumes are also projected to remain weak after sharp Q1 declines in both regions. Global PV production is expected to drop in the U.S. and EU, while China may see marginal gains. Bosch forecasts a 4–7% increase in PV production and 7–10% in two-wheelers in India for FY26.
Exporters such as Bharat Forge, Ramkrishna Forgings, Balkrishna Industries and SAMIL are exposed to these global headwinds, but Nuvama said it believes they “should outpace industry” due to robust order books and diversification.
With a global slowdown weighing on volumes across regions, Nuvama is tilting toward India-centric names that offer visibility on domestic demand and margin tailwinds.
