The brokerage firm Motilal Oswal has placed its bets on two heavyweights – Maruti Suzuki and Mahindra & Mahindra. If you are tracking auto stocks the question is – which one is in your garage?
Let’s take a look at what is happening in the auto world and why Motilal Oswal is bullish on these two players.
Motilal Oswal on auto sector: TVS Motor stands tall amid dip
As per the brokerage report, the two-wheeler industry stumbled in the April-June quarter (Q1FY26), with ICE (internal combustion engine) sales declining 8% year-on-year, marking the first contraction in seven quarters.
Motorcycles were hit harder, posting a 9% drop, while scooters dipped by 5% and mopeds by 11%, the report added
But amid this weakness, a few names bucked the trend. TVS Motor and Royal Enfield stood out with positive growth of 3% and 12%, respectively.
Interestingly, TVS Motor not only outperformed peers in the 150-250cc segment but also “emerged as the market leader” in that category, the brokerage noted.
On the flip side, Hero MotoCorp and Bajaj Auto saw declines of around 13% each, losing market share in the process. TVS Motor and Royal Enfield picked up those gains.
Motilal Oswal on Passenger Vehicles – Maruti Suzuki top pick
According to the brokerage report, in the passenger vehicle segment, sales remained sluggish in Q1FY26, down 1% YoY. Within the segment, car sales slumped by 11%, while utility vehicles slowed to 4% growth. However, the Utility Vehicles segment’s share in the overall passenger vehicle market expanded to 66%, up from 65% last year.
The brokerage further added that this is where M&M, Toyota, and Kia made their mark. M&M delivered a 22% volume growth, while Toyota and Kia reported 18% and 10%, respectively.
Maruti Suzuki, however, posted a 6% decline. Despite this, Motilal Oswal remains bullish on the company’s long-term prospects.
According to the brokerage, “Maruti Suzuki is our top pick, given its continued export momentum and an expected revival in the domestic UV share following its anticipated launch.”
Motilal Oswal on auto sector: Commercial Vehicles – VE Commercial Vehicles outperforms
As per the report, the commercial vehicle segment remained largely flat, with overall volumes declining 0.4% YoY. The goods segment shrank by 2%, while buses grew by 8%.
Within commercial vehicles, Tata Motors was the major underperformer, losing 360 basis points of market share. The company ceded ground in each of the four commercial vehicle sub-segments, making way for competitors like VE Commercial Vehicles, which Motilal Oswal says “outperformed in most of the commercial vehicle segments.”
Why Maruti and M&M are the top picks
Although a muted quarter across key auto categories, the brokerage firm is positive select OEMs
According to Motilal Oswal, “The FY26 outlook across most auto segments remains in the low- to mid-single digit mark.”
Maruti Suzuki, despite its near-term passenger vehicles dip, is backed for its strong export run and expected utility vehicles launches. M&M, meanwhile, is riding on “healthy demand momentum in both SUVs and tractors”, the brokerage report added.