TVS, Maruti Suzuki, M&M: Top Auto Stock Picks Ahead of Dec Sales Data

Nuvama Institutional Equities in its latest brokerage report expected double-digit YoY growth across categories, driven by continued positive customer sentiments spurred by better affordability.

This is a direct result of next-gen GST, new products, interest rate cuts and adequate finance availability despite some pressure on rural sentiments due to a drop in retail crop prices.

The brokerage firm also expected auto exports to record a rising momentum led by growth in Asia, Africa and Latin America.

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In the two-wheeler segment, the TVS Motor Company and Eicher Motors are poised to lead in the backdrop of a likely 22% year-on-year (YoY) rise in the domestic market, Nuvama noted. The strong growth momentum will be aided by positive customer sentiment spurred by better affordability (due to GST rate cuts) and adequate financing availability.

Meanwhile, Mahindra and Mahindra (M&M) and Maruti Suzuki Ltd will outperform among other passenger vehicle entities, according to the report.

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Two-Wheeler Dec Sales Expectations

As per Nuvama's forecast, exports will "increase at double digits led by growth in Asia, Africa and Latin America". For December wholesales, "we estimate total volume growth shall be 29% YoY for TVSL
(to 415,000 units), 26% for EIM-RE (to 100,000 units), 23% for HMCL (to 400,000 units) and 18% for BJAUT (to 380,000 units)."

PV Dec Sales Expectations

Discounts have inched up on a sequential basis for all OEMs. For MM and TMPV, discounts are higher even on a YoY basis, especially due to higher discounts for EVs. "We estimate total volume growth would be 29% YoY for MM- Auto (includes PV, CV and 3W) to 90,000 units, 23% for MSIL (to 220,000 units), 19% for TMPV (to 52,500 units), and 9% for HYUNDAI (to 60,000 units)," it said.

CV Dec Sales Expectations

We anticipated to grow in double digits in Dec-25 (up ~17% YoY in domestic market) owing to the positive impact of GST cuts, improved freight availability (due to higher consumption demand), adequate financing availability, some shift in demand from used to new vehicles and a low base. Moreover, we
reckon exports shall increase in double digits due to growth in the Asia region.

We estimate total volume shall increase 18% YoY for EIM-VECV (to 9,800 units), 17% for TMCV (to 39,500 units) and 17% YoY for AL (to 19,800 units).

"Tractor industry volumes to grow in teens in Dec-25 (up ~14% YoY in domestic market) owing to better affordability in the wake of GST rate cuts and Maharashtra state subsidy scheme. However, terms of trade have turned negative owing to lower retail crop prices and increase in input costs," it said.

As per the Nuvama's note, "We forecast total volumes of MM Farm/Escorts shall grow at 16%/13% YoY to 26,500/6,200 units."