Accumulate Mahindra & Mahindra, Tata Motors, says Emkay

Emkay's Indian auto sector update

Macro-recovery plays factoring a very strong recovery in FY14/15; Possibility of disappointment remain high as signs of recovery remain elusive

Remain cautious on OEM demand recovery; our channel checks still suggest weak consumer sentiments and no uptick in footfall/conversions

Prefer bottom up ideas where valuations are less frothy to macro recovery themes - Buy Hero Motocorp (HMCL), Exide Industries (EXID), Amara Raja Batteries (AMRJ), Motherson Sumi Systems (MSS)

Accumulate Mahindra and Mahindra (MM) & Tata Motors (TTMT) as they are likely to disappoint lesser than recovery plays like Ashok Leyland (AL), Maruti Suzuki India (MSIL) in the near term.

We believe that a good monsoon and populist schemes ahead of the elections would mean rural recovery would be faster than recovery in urban India.

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