Macro Tailwinds: GST Cuts and RBI Interventions
The festive season saw a pick-up in demand for four-wheeler vehicles ranging from the lower end models like Maruti’s Alto to Mahindra and Mahindra’s (M&M) BE 6, a high-end electric SUV.
This trend was thanks to the earlier GST cuts to 18% for engines with a capacity up to 1200 cc coupled with SUVs taxed at a unified 40% GST, as against an earlier effective total tax of up to 50%.
Also, the RBI has taken several measures to lower cost of credit including auto loans over the past 6-9 months.
Valuation Play: Maruti vs. Hyundai vs. M&M
Investors have been bullish on four-wheeler stocks – Mahindra & Mahindra (M&M) ended 1.6% lower at Rs 3,533 on Friday, and not too far from its 52-week high of Rs 3,840 that was reached on 5 January, 2026.
Maruti Suzuki India ended 0.6% lower at Rs 15,227 on Friday, and not too far from its 52-week high of Rs 17,371 that was reached on 5 January, 2026.
Tata Motors Passenger Vehicles, which was listed only recently, trades at Rs 380. It was down less than 1% on Friday.
And Hyundai Motor India ended 1.4% lower at Rs 2,158, and it had reached its 52-week high of Rs 2,889.7 on 22 September, 2025.
So let’s dig in to find out which four-wheel auto company went ahead of others….
Q3FY26 Report Card
Sales of vehicles in the domestic market were broadly buoyant ranging from the entry level to premium end. However, a cause for concern was the rising cost of steel and copper, amongst other metal inputs in the December 2025 quarter.
Operational Performance in December 2025 quarter
| Company | Sales Growth (%) | Net Profit Growth (%) |
| Mahindra & Mahindra | 26.10% | 32.60% |
| Maruti Suzuki India | 28.70% | 3.70% |
| Hyundai Motor India (Consolidated) | 8.00% | 6.40% |
| Tata Motors Passenger Vehicles (Consolidated) | -25.60% | n/a |
Mahindra & Mahindra (M&M) – racing ahead of competitors with SUV range
Mahindra & Mahindra (M&M) steered ahead of its competitors with very strong demand for its range of SUVs, farm equipment and light commercial vehicles (LCVs).
Its SUV sales jumped 26% y-o-y to 179,000 vehicles in Q3FY26 led by strong demand for its recently launched electric models like BE 6 and XEV 9E. The company has highlighted it has the largest market share in the SUV segment.
Also, a revival in the agriculture sector led by an above normal monsoon this year helped the Mumbai-based company’s tractor sales rise 23% y-o-y to 1,50,000 in Q3FY26, and here too the company is the market leader with a share of more than 44%.
Strong vehicle sales helped M&M’s standalone revenue from operations rise 26.1% y-o-y to Rs 38,516 crore in Q3FY26. The company faced a one-time hit of Rs 98.2 crore related to the new labour code and its operating profit margin were broadly flat at 14.7% in the quarter under review.
Strong vehicle sales helped its standalone net profit rose 32.6% y-o-y to Rs 3,931.3 crore in the December 2025 quarter.
The core auto and farm equipment operations are reflected in M&M’s standalone results.
Maruti Suzuki – GST-related boom in small cars, margins under pressure
The New Delhi-based player benefited from earlier GST cuts to 18% for engines with a capacity up to 1200 cc and the subsequent revival in small car sales in Q3FY26. The company has highlighted that its total sales volume grew 17.9% y-o-y to 6.67 lakh in the December 2025 quarter, with sales of small cars like Alto, WagonR and Celerio rising 68,328 units in the quarter under review.
As a result, the company’s standalone revenue from operations jumped 28.7% y-o-y to Rs 49,891.5 crore in the December 2025 quarter, and its realisations grew 9.2% y-o-y to Rs 7.47 lakh per unit in the quarter under review.
The New Delhi-based auto maker had a one-time hit of nearly Rs 594 crore related to the new labour code.
Higher operating costs resulted in its core standalone operating profit margin shrinking 170 basis points y-o-y to 11% in Q3FY26. Its standalone net profit also grew just 3.7% y-o-y to Rs 3,794 crore in the quarter under review.
Hyundai Motor India – Export-led growth
Its vehicle sales grew 4.8% y-o-y to 1.95 lakh units in Q3FY26 and that was thanks to exports that grew 21% y-o-y to 48,888 units in the quarter under review.
The company’s consolidated revenue from operations grew 8% y-o-y to Rs 17,973 crore in Q3FY26, and also its realisations grew 2.9% y-o-y to Rs 9.19 lakh per unit in the quarter under review.
Higher employee costs, although the company did not specify those related to new labour code, along with higher raw material costs resulted in its operating profit margin that was broadly flat at 11.1% in the December 2025 quarter.
Its consolidated net profit grew 6.4% y-o-y to Rs 1,234 crore in Q3FY26.
Tata Motors Passenger Vehicles (formerly Tata Motors) – UK-based JLR operations hit by cyber incident
At the key UK-based Jaguar and Land Rover (JLR) operations of Tata Motors Passenger Vehicles were hit by cyber incident. Its car volumes at UK operations were 59,100 in December 2025 quarter as against 104,400 a year earlier. As a result, its sales in the UK operations slumped to £ 4.5 billion (nearly Rs 55,588 crore) as against £ 7.48 billion (nearly Rs 91,400 crore) a year earlier.
The much smaller Indian operations had strong growth – vehicle sales of 171,000 in Q3FY26, a jump of 22% y-o-y.
Nevertheless, the problems in its key UK operations resulted in its consolidated revenue from operations shrinking 25.6% y-o-y to Rs 70,108 crore in the December 2025 quarter, and a net loss of Rs 3,483 crore in the quarter under review.
Growth plans and launches for 2026
Auto companies have planned a slew of launches in 2026 as well as expansion in production facilities to take advantage of strong auto sales.
M&M had launched XUV 7X0 in early January 2026, and the company’s forthcoming launches include Mahindra BE 07 and Mahindra Thar.e. The company is also ramping up capacity via debottlenecking at its factories at Chakan and Nagpur.
Other leading players are also focusing on expanding their product range. Maruti Suzuki is expected to launch all-electric SUV, the e Vitara, the 3-row Grand Vitara and Maruti Fronx Hybrid, amongst others.
Meanwhile, Hyundai Motor India has commenced production of passenger vehicles at its manufacturing facility at Talegaon, Maharashtra, with effect from 01 October 2025. This production facility has an annual installed capacity of 170,000 units and the ramp up in production is expected over the next few quarters.
It had also launched Hyundai Venue in early November, 2025 and by early February, 2025, the company had 80,000 bookings. In addition, the company had recently made a foray in the commercial mobility segment (taxis).
And Tata Motors Passenger Vehicles in its investor presentation has highlighted that it expects a sharp recovery in Q4FY26 led by normalization of JLR volumes. Investors will be closely monitoring sales volumes at UK-based JLR, given its overwhelming importance to the company’s consolidated results. JLR had recently launched its factory in Tamil Nadu, and ramp up is expected over next few quarters.
In 2026, JLR is set to launch the Range Rover Electric and a new Jaguar Electric 4-door GT, marking a major shift toward its electric vehicle future.
Valuations and investors on Dalal Street
Valuations at a glance
| Company | P/E Ratio |
| Mahindra & Mahindra | 28.7 |
| Maruti Suzuki India | 33.0 |
| Hyundai Motor India (Consolidated) | 30.6 |
| Tata Motors Passenger Vehicles (Consolidated) | 23.3 |
The P/E Comparison: Why Tata Motors Offers a Value Edge
M&M trades at a standalone P/E of 28.7, according to Screener.in, while Maruti Suzuki trades at 33.
Hyundai Motor India trades at a consolidated P/E of 30.6, and Tata Motors Passenger Vehicles trades on a consolidated basis at 23.3.
Q4 Outlook: Normalizing UK Operations and Growth Projections
M&M showed a very strong performance in the December 2025 quarter and investors could add that stock to their watch list.
However, a ‘dark horse’ could be Tata Motors Passenger Vehicles as its operations in the UK are expected to be normalised in the March 2026 quarter, and as a result, it could show strong growth. Investors could watch Tata Motors Passenger Vehicles very closely.
Go ahead, and add the auto stocks to your watchlist and see if the momentum continues.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
Disclaimer: The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.