Prefer M&M, Maruti Suzuki, Eicher in OEMs; Bharat Forge in auto components segment: CLSA

It expects passenger vehicle and medium & heavy commercial vehicle segments to post a healthy 10 percent volume CAGR in FY19-20. It also expects 2-wheelers to post moderate to 7 percent CAGR in FY19-20.

CLSA believes the competition should remain high in 2-wheelers & trucks but it is easing in passenger vehicles.

Higher input prices & regulatory changes will pose margin headwinds, it feels. It prefers stocks benefitting from cyclical recovery or having solid franchise.