Jefferies is favouring nine Indian auto stocks as stronger demand and improving cost conditions begin to separate the likely winners from the rest of the sector. The brokerage has retained a ‘Buy’ rating on TVS Motor, Eicher Motors, Mahindra & Mahindra, Maruti Suzuki, Belrise Industries, Bharat Forge, Samvardhana Motherson International, Sona BLW Precision Forgings and UNO Minda.
The preference is not uniform across the auto sector. Jefferies is more positive on two-wheelers, with TVS Motor and Eicher Motors as its top picks, while it remains cautious on passenger vehicles, particularly Tata Motors Passenger Vehicles and Hyundai Motor India.
The June quarter showed why. Two-wheeler volumes across Bajaj Auto, Eicher Motors, Hero MotoCorp and TVS Motor grew 26% YoY, while EBIT rose 39% YoY. Passenger-vehicle volumes grew 25%, but EBIT declined 15%, showing a much sharper margin squeeze despite healthy demand.
Jefferies said, “Amid opposing forces of strong demand and cost pressures in Jun-Q, 2W OEMs demonstrated superior ability to translate top-line growth to EBIT, while PVs lagged.”
Jefferies on TVS Motor: ‘Buy’
TVS Motor Company Ltd. is Jefferies’ preferred two-wheeler stock along with Eicher Motors. The brokerage has a ‘Buy’ rating and expects the company to benefit from stronger demand and a better earnings trajectory.
Consensus FY27 EPS estimates for TVS Motor increased 5% in the September quarter, after declining 2% in the June quarter. Jefferies’ FY27 EPS estimate stands at Rs 97, compared with consensus at Rs 96. Its FY28 estimate is Rs 122 against consensus of Rs 114, while its FY29 estimate is Rs 149 against Rs 133.
The estimates therefore remain ahead of consensus in each of the next three financial years. The difference is particularly visible in FY29, when Jefferies’ estimate is about 12% above consensus.
TVS Motor has also gained 17% CYTD, according to the report, as the market has increasingly focused on the improvement in two-wheeler earnings.
Jefferies on Eicher Motors: ‘Buy’
Eicher Motors Ltd. is the second top two-wheeler pick in the Jefferies report. The brokerage has retained its ‘Buy’ rating as earnings expectations have started moving higher.
Consensus FY27 EPS estimates increased 2% in the September quarter, following a 1% cut in June. Jefferies estimates FY27 EPS at Rs 231, compared with consensus of Rs 230.
Its FY28 EPS estimate of Rs 274 is above consensus of Rs 271, while the FY29 estimate of Rs 316 is higher than the consensus figure of Rs 311.
Eicher Motors has delivered a 10% CYTD return. Jefferies’ estimates remain modestly ahead of consensus, suggesting that the stock’s case is being driven more by earnings delivery than a broad valuation argument.
Jefferies on Mahindra & Mahindra: ‘Buy’
Mahindra & Mahindra carries a ‘Buy’ rating, although the earnings revision trend is less favourable than for TVS Motor and Eicher Motors.
Consensus FY27 EPS estimates declined 2% in the September quarter, following another 2% cut in June. Jefferies expects FY27 EPS at Rs 133, compared with consensus of Rs 134.
For FY28, Jefferies estimates EPS at Rs 150 against consensus of Rs 155. Its FY29 estimate is Rs 176, slightly above the consensus estimate of Rs 175.
The numbers show a more balanced call. Jefferies remains positive on the stock even though its near-term earnings estimates do not consistently exceed consensus.
Jefferies on Maruti Suzuki: ‘Buy’
Maruti Suzuki India Ltd. has a ‘Buy’ rating despite a sharp reduction in consensus earnings estimates. FY27 EPS estimates were cut 8% in the September quarter, following an 8% reduction in June.
Jefferies estimates FY27 EPS at Rs 466, below consensus of Rs 479. Its FY28 estimate of Rs 614, however, is above consensus of Rs 603, while FY29 EPS of Rs 702 is also above the consensus estimate of Rs 678.
Maruti Suzuki’s stock has declined 18% CYTD, according to the report.
The earnings picture therefore remains uneven. The near-term consensus estimate has come under pressure, but Jefferies expects its longer-term earnings trajectory to be stronger than the current consensus numbers suggest.
Jefferies on Belrise Industries: ‘Buy’
Belrise Industries Ltd. has a ‘Buy’ rating and remains one of Jefferies’ preferred auto-component stocks.
Consensus FY27 EPS estimates rose 8% in the September quarter, reversing an 8% cut in June. Jefferies estimates FY27 EPS at Rs 7, broadly in line with consensus of Rs 6.9.
The brokerage estimates FY28 EPS at Rs 9.7 and FY29 EPS at Rs 11.1. The stock has gained 28% CYTD, according to the report.
The earnings revision pattern is important here. The sharp September-quarter upgrade came after an equally sharp reduction in June, suggesting that estimates have been volatile rather than moving steadily in one direction.
Jefferies on Bharat Forge: ‘Buy’
Bharat Forge carries a ‘Buy’ rating and has delivered a 43% CYTD return, making it one of the stronger performers in Jefferies’ auto-component coverage.
Consensus FY27 EPS estimates declined 8% in the September quarter, following a 2% cut in June. Jefferies estimates FY27 EPS at Rs 32, below consensus of Rs 34.
The FY28 estimate is broadly around consensus, while the brokerage remains positive on the company despite the recent downward movement in earnings estimates.
The stock performance has therefore run ahead of the immediate earnings revision trend. That is a feature seen across several global-exposure auto-component companies covered by Jefferies.
Jefferies on Samvardhana Motherson: ‘Buy’
Samvardhana Motherson International is rated ‘Buy’ and has gained 42% CYTD. Unlike Bharat Forge, the company has also seen a strong improvement in consensus earnings estimates.
Consensus FY27 EPS estimates rose 6% in the September quarter, after a 6% increase in June. Jefferies estimates FY27 EPS at Rs 5.2, compared with consensus of Rs 5.4.
Its FY28 EPS estimate is Rs 6.5 against consensus of Rs 6.9, while the FY29 estimate is Rs 7.6 against consensus of Rs 8.2.
Jefferies said, “Auto-comps with global exposure have witnessed a big reversal in stock performance in 2026 after a weak 2025.”
Motherson is one of the clearest examples of that trend, with its stock performance supported by improving earnings expectations.
Jefferies on Sona BLW: ‘Buy’
Sona BLW Precision Forgings, or Sona Comstar, has a ‘Buy’ rating and has delivered the strongest CYTD performance among the auto stocks covered by Jefferies.
The stock has gained 72% CYTD. Consensus FY27 EPS estimates rose 3% in the September quarter, following another 3% increase in June.
Jefferies estimates FY27 EPS at Rs 13, in line with consensus. Its FY28 estimate is Rs 16 against consensus of Rs 17, while the FY29 estimate is Rs 19 against Rs 21.
The sharp stock performance has therefore been accompanied by positive earnings revisions, although Jefferies’ own longer-term EPS estimates remain below consensus.
Jefferies on Uno Minda: ‘Buy’
Uno Minda has a ‘Buy’ rating, with consensus FY27 EPS estimates unchanged in the September quarter after a 1% cut in June.
Jefferies estimates FY27 EPS at Rs 25, ahead of consensus of Rs 24. Its FY28 estimate of Rs 32 is also above consensus of Rs 31, while the FY29 estimate is broadly in line with consensus.
The stock has declined 1% CYTD, according to the report, making it a different proposition from Sona BLW, Bharat Forge and Motherson, where recent stock performance has been considerably stronger.
The earnings estimates nevertheless remain supportive, particularly for FY27 and FY28.
Two-wheelers are pulling ahead on margins
The central argument in Jefferies’ report is the widening difference between two-wheelers and passenger vehicles.
Two-wheeler EBIT margins declined only 0.5 percentage point QoQ in the June quarter, compared with a 3.1 percentage point decline for passenger vehicles. On a YoY basis, two-wheeler EBIT margins expanded 0.3 percentage point, while passenger-vehicle margins contracted 2.5 percentage points.
This gave two-wheeler companies greater room to convert volume growth into profit. Jefferies expects the earnings advantage to continue, although it cautions that volume growth could slow from September because of a tougher base.
The brokerage said, “We are constructive on autos given strong demand and peak of margin pressures behind, although volume growth will moderate Sep onward on high base.”
That view explains the preference for TVS Motor and Eicher Motors. Both have seen positive earnings revisions, and both are positioned in the segment where Jefferies sees the strongest ability to turn demand into operating profit.
Passenger vehicles remain the weak link
Jefferies’ caution is most visible in Tata Motors Passenger Vehicles and Hyundai Motor India, both of which carry ‘Underperform’ ratings.
Tata Motors Passenger Vehicles saw consensus FY27 EPS estimates cut 16% in the September quarter, after a 15% reduction in June. On a CYTD basis, FY27 estimates have fallen 44%.
Hyundai Motor India saw FY27 estimates cut 8% in the September quarter, following a 14% cut in June. Its CYTD reduction has reached 22%.
The divergence from the two-wheeler segment is stark. Passenger-vehicle volumes remain strong, but the earnings conversion is weaker because competitive intensity and costs are putting pressure on margins.
Auto-component stocks have taken the lead
The strongest stock returns in the coverage universe have come from auto-component companies with global exposure.
Sona BLW is up 72% CYTD, Bharat Forge 43%, Samvardhana Motherson 42% and Belrise Industries 28%. Among the major two-wheeler OEMs, Bajaj Auto has gained 24%, TVS Motor 17% and Eicher Motors 10%.
Jefferies said the reversal in global auto-component stocks has been significant after a weak 2025. The brokerage also noted that both earnings expectations and valuations have contributed to the move.
The distinction is useful. The nine Buy-rated names are not a single trade. TVS Motor and Eicher Motors are the clearest two-wheeler calls, while Sona BLW, Bharat Forge, Motherson and Belrise offer exposure to the global auto-component cycle. Maruti Suzuki and M&M provide large passenger-vehicle and SUV exposure, while Uno Minda gives exposure to the auto-component space.
Jefferies’ 9 ‘Buy’-rated auto stocks
| Stock | Jefferies rating | FY27E EPS | Consensus EPS | September-quarter EPS revision |
| TVS Motor | ‘Buy’ | Rs 97 | Rs 96 | +5% |
| Eicher Motors | ‘Buy’ | Rs 231 | Rs 230 | +2% |
| Mahindra & Mahindra | ‘Buy’ | Rs 133 | Rs 134 | -2% |
| Maruti Suzuki | ‘Buy’ | Rs 466 | Rs 479 | -8% |
| Belrise Industries | ‘Buy’ | Rs 7.0 | Rs 6.9 | +8% |
| Bharat Forge | ‘Buy’ | Rs 32 | Rs 34 | -8% |
| Samvardhana Motherson | ‘Buy’ | Rs 5.2 | Rs 5.4 | +6% |
| Sona BLW | ‘Buy’ | Rs 13 | Rs 13 | +3% |
| Uno Minda | ‘Buy’ | Rs 25 | Rs 24 | 0% |
Source: Jefferies, Bloomberg and Jefferies estimates.
The table also shows why the nine stocks cannot be treated as one uniform call. TVS Motor, Eicher Motors and Motherson have seen positive earnings revisions, while Maruti Suzuki and Bharat Forge have faced cuts. Yet Jefferies continues to rate all of them Buy.
The brokerage’s ratings therefore take into account more than the immediate direction of consensus EPS. Business positioning, expected demand, margins, valuation and the longer-term earnings path all feed into the call.
What separates the Buy list from the weaker calls
Jefferies has not turned positive on the entire auto sector. Bajaj Auto, Hero MotoCorp and Ashok Leyland remain ‘Hold’, while Tata Motors Passenger Vehicles and Hyundai Motor India are rated ‘Underperform’.
The contrast is strongest between two-wheelers and passenger vehicles. Two-wheelers are seeing better earnings revisions and stronger margin performance, while passenger vehicles are facing more pressure despite healthy volumes.
Within components, the brokerage remains positive on companies with global exposure.
The report therefore points to a selective auto call rather than a sector-wide rally. J
Disclaimer: This article is based solely on Jefferies’ Upward Inflection in 2W Earnings report dated August 19, 2026, and the data contained in the supplied report. Ratings, EPS estimates, consensus estimates, earnings revisions and stock performance figures are sourced from Jefferies and Bloomberg as cited in the report. The report does not provide individual stock target prices or stock-specific upside percentages in the supplied material. Jefferies’ rating framework defines a ‘Buy’ as an expected total return of 15% or more over 12 months, but that threshold is not an individual stock upside estimate. No stock-specific target price or additional upside figure has therefore been added. The information is for reporting purposes only and should not be treated as investment advice or a recommendation to buy or sell any security. Investors should consult with SEBI registered advisors only before making any investment decisions.