Best Automobile Stocks in India

From motorcycles and cars to commercial vehicles and more, the Indian automotive industry provides many different automobiles.

The Indian automotive industry contributes about 50% of the manufacturing GDP 26% of the industrial GDP and 7.1 percent of the total GDP. India’s automotive sector is ranked third globally and provides an ever-changing environment for Automobile Stocks.  

Automobile Industry in India – A Brief Overview

The Indian automobile industry has expanded dramatically in recent years and has made India one of the fastest-growing auto markets worldwide. With a broad range of automobiles catering to different categories, India has become a center for manufacturing cars and exports.

The automotive industry has a myriad of original equipment makers and hundreds of auto component manufacturers. In particular, India holds a prominent place in the world market for heavy vehicles, ranking as the biggest tractor producer and buses, the second largest manufacturer of vehicles, and the third largest manufacturer of trucks with heavy weights.

Today, India is witnessing an increase in the use of connected automobile technology that connects vehicles to Internet connectivity. It allows features such as remotely diagnosed diagnostics and real-time navigation and interaction between vehicles. Although fully automated vehicles aren’t yet available on Indian roads, some companies are testing driverless vehicles. This is a sign of the increasing enthusiasm for autonomous driving technologies in the nation.

In addition, many factors are responsible for the expansion of the Indian auto market, which includes the growing urbanization rate, a rising middle-class population, as well as increasing attention to environmentally green mobility solutions. Additionally, India’s Government of India has played an important role in encouraging expansion in the auto industry. Initiatives like “Make in India and the National Electric Mobility Mission ‘ boosted investment, research and development, and innovation as well as infrastructure improvements for electric automobiles.

According to a study the market is predicted to grow it is expected that the Indian Automotive Market size will over the CAGR of 8.1 percent between 2023 and 2030. In addition by 2030, the market is anticipated to reach USD 217.90 billion indicating the resilience of the industry and the possibility of continued growth.

IPOs to keep an eye out for

View all IPOs

Companies	Type	Bidding Dates
Le Travenues Technology (Ixigo)	Regular	Opens 10 Jun	View Details
FabIndia	Regular	–	View Details
Ola Electric	Regular	–	View Details
OYO	Regular	–	View Details
boAt	Regular	–	View Details

Best Automobile Stocks in India 2024 as per Analyst Ratings

The table below lists the most popular auto stocks as per analyst ratings. We’ve selected analyst ratings from the I/B/E/S databases to be a reference to create this list since these analysts conduct extensive research into the stock market before determining the stock.

Here’s the list:

S.No.	Automotive Stocks India (as per the analyst’s ratings)	BUY Analyst Rating (in %)
1.	Samvardhana Motherson	94
2.	Mahindra & Mahindra	89
3.	Tata Motors	78
4.	Ashok Leyland	77
5.	Maruti Suzuki India	70
*Our selection criteria for the best stocks that are based on analyst ratings are listed at the end of this page.

Top Automobile Stocks in India in 2024 as per Market Capitalisation

The table below outlines the most popular car stocks that are available in India in terms of market capitalization:

S.No.	Automotive Stocks India (as per the market capitalization)
1.	Maruti Suzuki India
2.	Tata Motors
3.	Bajaj Auto
4.	Mahindra & Mahindra
5.	Eicher Motors
*Our selection criteria for the top stocks that are based on Market Capitalisation are listed at the end of the blog.

Overview of Best Automobile Stocks in India as per Analyst Ratings

Here is a comprehensive review of the top automotive sector stocks by analyst ratings.

1) Samvardhana Motherson

Samvardhana Motherson Automotive Systems Group (SMRPBV) is a part of the Motherson Group. (SMRPBV) is a member of the Motherson Group, and is fully owned by Samvardhana Motherson International Limited (SAMIL) which was formerly called Motherson Sumi Systems Limited (MSSL).

It manufactures and sells rear-view mirrors as well as wire harnesses, and other interior and exterior components for automobiles. Its range of products includes doors, consoles bumpers instrument panels, decorative interior trims, and much more.

The products of SAMIL are utilized in many vehicles such as automobiles, bikes, trucks, and tractors, as well as medical equipment. In addition, it trades goods and offers IT services, and also supports manufacturing in the automotive industry as well as others. SMRPBV is a subsidiary of its own including Samvardhana Motherson Peguform (SMP), Samvardhana Motherson Reflectec (SMR) along Motherson Innovations (MI). With 148 manufacturing facilities across 32 nations, SMRPBV operates in all the major global production zones.

2) Mahindra & Mahindra

Formerly called Mahindra & Mohammed, Mahindra and Mahindra Limited was founded in the year 1945, as an auto manufacturing firm in India. Mahindra Automotive provides a wide variety of vehicles, such as pickups, SUVs, buses small commercial vehicles, trucks electric SUVs, as well as electric vehicles.

Mahindra Group’s other business segments include farms, real estate, and technology services renewable energy as well as logistics, financial services, hospitality, and emerging business & equity investments. The auto industry has an international presence across regions such as Asia-Pacific, Africa & the Middle East, and South Central America.

It is operating it operates in New Zealand, Australia, and Morocco as well as Morocco, the UAE, Indonesia, Sri Lanka, Bhutan, Kenya, Nepal, Bangladesh, Mozambique, South Africa, and numerous other countries.

3) Tata Motors

Based in Mumbai, Tata Motors Limited (TML) is one of India’s biggest automobile makers, offering an array of connected, intelligent, and electric mobility solutions.

The company is divided into two major segments which are automotive and other. Its automotive division covers everything from the development of, designing manufacturing, assembling, and selling vehicles, which includes financing of vehicles, and selling accessories and parts for related vehicles. The other operation segment focuses on offering IT services as well as machine tools and solutions to automate factories.

Tata Motors’ automotive business is further divided into four categories: commercial vehicles luxury vehicles, passenger electric vehicles, and luxury. This segment of commercial vehicles comprises trucks, small trucks vans, buses, and innovative mobility solutions. The electric and passenger vehicles are comprised of SUVs and cars. Luxury vehicle segments comprise Jaguars as well as Land Rovers.

4) Ashok Leyland

Ashok Leyland, the flagship of the Hinduja Group, ranks as the second-largest manufacturer of vehicles for commercial use in India as well as the fourth-largest producer of buses in the world, and the 19th-largest manufacturer of trucks.

The company’s headquarters are in Chennai the company operates in five segments: buses, trucks, and light vehicles, as well as defense and power solutions. Within the trucks segment, it supplies haulage tippers, tractors, as well as intermediate commercial vehicles (ICV). Bus product classes comprise staff, city, intercity stage carriers tourist schools, and college buses.

The categories of light vehicles include tiny commercial cars, cargo transporters, and even passenger automobiles. Furthermore, the power solutions provided by Ashok Leyland include diesel generators, marine engines industrial engines agricultural engines, as well as gas Gensets. Ashok Leyland also produces defense vehicles, including light tactical, armored, simulators, high mobility, logistical vehicles, and tracked vehicles. Ashok Leyland has nine manufacturing facilities, of which seven are located situated in India.

5) Maruti Suzuki India

Established in 2001, Maruti Suzuki India Limited was established in 1981 as Maruti Udyog Limited. In 1982 the company signed a joint venture agreement and licence arrangement in conjunction with Suzuki Motor Corporation, Japan.

The main focus of the company is manufacturing and selling passenger cars in India. Maruti Suzuki has broadened its product line to include 16 automobile models, with over 150 different variants.

Its range includes vehicles like Alto, Ertiga, Baleno, Super Carry, Eeco Cargo, and XL6. Ignis, S-Cross, S-Presso, Celerio, WagonR, Swift, DZire, Ciaz and Eeco. Apart from the manufacturing process, Maruti Suzuki offers various options such as financing and insurance accessories, parts leasing, driving classes, and fleet management.

Maruti Suzuki operates 2 modern manufacturing facilities at Gurugram in Haryana and Manesar located in Haryana. These facilities are based on modern technology and can manufacture around 1.5 million units annually.

Factors to Consider Before Investing in Automobile Stocks in India

Before you invest in the auto sector stocks it is essential to take into consideration a few important factors listed in the following paragraphs:

• Consumer Preferences

Watch for changes in consumer preferences, for example, a growing need for eco-friendly or fuel-efficient sustainable vehicles. Be aware of trends in consumer preferences to make educated choices regarding investment.

• Market Conditions

Before you decide to invest in auto stocks take a close look at the present market conditions and consumer mood. The demand for automobiles is largely dependent on economic conditions.

• Financial Stability

Examine the financial health of investment options by examining the figures for sales of the company as well as the level of debt in addition to the flow of cash. It is essential to ensure that the business can fund its business.

• Competitiveness and Growth Potential

Examine the competitiveness of each car company by looking at the market share strengths, brand strength, and marketplace. Furthermore, you should be aware of its participation in new trends such as electric mobility, to assess its future growth prospects.

• Regulatory Environment

Stay informed about the automotive industry’s ever-changing regulatory environment. The policies of the government as well as emission standards and safety rules can greatly influence the automotive industry.

Should You Invest in Automobile Stocks?

Although the potential benefits of automotive stocks may be appealing, however, it is essential to know the inherent dangers. The auto sector is cyclical, which means the sales of vehicles fluctuate in response to economic circumstances. When the economy is in decline, automobile sales may decrease and affect the price of car stocks. Additionally, changes to regulations that include more stringent environmental standards, could affect the cost of manufacturing and profit.

Additionally, there is a lot of competition in the field and many established businesses always innovating and competing. The intense competition can affect profit margins and make it difficult for businesses to sustain consistent increases in revenue and profits.

Furthermore, interruptions to your supply chain for example component shortages or natural catastrophes could hinder production and impact the prices of shares. Thus, before you invest in auto stocks you must do a thorough study and remain up-to-date with the latest developments and trends in the industry to reduce the risk effectively.

The Bottom Line

To summarize, to sum up, the Indian auto industry offers promising opportunities for investing. But, be sure to consider the many factors listed above before investing in the auto sector and be aware of the latest developments in electric automobiles.

Auto stocks are a great investment, but with the potential to increase you need to be sure to make educated investment decisions that are in line with your financial objectives and your risk tolerance.

*Stock Selection Criteria for Top Stocks Based on Analyst Rating Investors are required to read through the following guidelines about the stock selection criteria when looking through the stocks according to analyst ratings. The stocks are shortlisted according to analyst ratings given from the I/B/E/S (The Institutional Broker’s Estimate System) database, which is further combined by Refinitiv. Ratings are based on analysts’ predictions of the company’s performance and incorporate the metrics of profits per share (EPS), sales, and net profit. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest-Tech Pvt. Ltd. (formerly called the Nextbillion Technology Private. Ltd.). Before investing money, they should do their studies and not rely on the information presented in this article. This allows investors to make the right investment decisions according to their financial needs, objectives for investing, and risk tolerance.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation These stocks are selected according to their market capitalization, which is the value of the outstanding shares of a company. The stock selection is made in ascending order, placing the most prestigious companies first, while smaller companies are placed later. This makes it easier to rank stocks according to their market size. It is vital to keep in mind that market capitalization does not in any way ensure a company’s performance or the return it earns from its shares. However, it could serve as a criterion for selecting companies within a specific sector. Investors must be aware that other aspects, including financial health, efficiency of management, and market trends have a major impact on the performance of an investment. This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly called Nextbillion Technology Private. Ltd.).

Disclaimer This blog is only intended for educational use. The securities/investments quoted here are not recommendatory. To learn more about the RA disclaimer, go to the link below. Research Analyst – Aakash Baid

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What are the specific market trends and regulatory changes that could impact the automotive industry shortly?

How do the growth potential and competitiveness of each car company compare to others in the industry?

What are the specific financial metrics and criteria used to rank the top stocks for investment?