Tata Motors, Maruti top picks; negative on Hero, TVS Motor: CLSA

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26 Aug, 2025 12:21

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CLSA says Tata Motors continued to be its top pick in Indian autos followed by Maruti Suzuki that has an outperform rating, especially after recent month sales data. The brokerage is also positive on Mahindra & Mahindra and Bajaj Auto, which both also have outperform rating while it is negative on Eicher Motors, Hero MotoCorp and TVS Motor Company.

After a long downturn, CLSA expects India's auto demand to gradually recover over the next two years. In FY17, it expects passenger vehicle (PV) industry sales to grow 9 percent YoY, 2-wheelers (2Ws) to grow 11 percent and medium & heavy commercial vehicles (M&HCVs) to grow 25 percent.

In May, India's PV volumes grew 6 percent YoY, 2Ws rose 10 percent while trucks grew 27 percent YoY.

PV as well as 2W sales growth rates have softened sequentially after a sharp improvement in April but still looked decent, says the brokerage, adding there was strong growth in small utility vehicles (SUVs) and commercial vehicles sales.

In case of 2Ws, this was largely expected as a concentrated wedding season in March-April this year had boosted growth in earlier months, says the brokerage. In PVs, Maruti gained 2.5 percentage point (ppt) share QoQ led by the success of its new models (Vitara Brezza & Baleno), while M&M lost 1ppt QoQ. In 2Ws, Hero lost 2ppt QoQ share, while Bajaj and Honda gained 1ppt each.

Meanwhile, truck demand remained strong with M&HCV sales rising 27 percent YoY in May.

CLSA says Tata Motors and Eicher Motors have gained 2ppt QoQ share each in Q1 while Ashok Leyland has lost 4ppt share.

Light commercial vehicle sales grew 14 percent YoY in May and are seeing signs of a recovery on a low base. M&M has gained 1ppt share QoQ, primarily from Tata Motors, says the brokerage.Posted by Sunil Shankar Matkar