Nomura maintains Mahindra & Mahindra and Ather as its top picks in passenger vehicles and two-wheelers, respectively, as it expects Ather, TVS Motor and Eicher Motors to potentially beat 2QFY27 estimates. TMPV and Ashok Leyland could miss estimates, while among auto ancillaries, Sona Comstar, Bharat Forge, Motherson and Motherson Sumi Wiring India could surprise positively.
Nomura also maintains its 'Buy' ratings on Hyundai Motor India and TVS Motor, while preferring Sona Comstar and Uno Minda among auto suppliers.
Domestic volume growth remained robust in 2QFY27, with MHCVs growing 34% year-on-year, followed by passenger vehicles at 30%, LCVs at 23% and two-wheelers at 14%. Tractor volumes declined 5% year-on-year.
The brokerage said the "more significant trend" was the continued acceleration in EV adoption, with EV penetration above 7% for passenger vehicles and above 11% for two-wheelers. It expects this trend to continue through 2HFY27F, with EV penetration rising across both segments.
"Companies with relatively high EV exposure, competitive products and established EV technology should be better placed to grow well ahead of the industry," Nomura said, while incumbents with predominantly ICE-led portfolios could face increasing market share pressure.