Eicher Motors, Hyundai and Tata Motors' passenger vehicle business are Nuvama Institutional Equities' top picks in the auto sector ahead of Diwali 2026, as the brokerage favours automakers with new product launches and healthy waiting periods. However, it expects vehicle volume growth to moderate in the second half of FY27 as festive demand shows signs of slowing after a strong first half.
Initial festive-season registrations since Navratri have been mixed. Commercial vehicle (CV) registrations grew 21% year-on-year (YoY), while two-wheeler (2W) registrations rose 13%. Passenger vehicle (PV) registrations, however, declined 9% YoY. Festive-season performance has also lagged the over 20% growth recorded across categories in the first half of FY27.
Dealer checks across Madhya Pradesh, Bihar and Jharkhand indicate moderating demand due to a high base following last year's GST cuts, intermittent weakness in rural demand, and longer waiting periods, particularly for passenger vehicles. Meanwhile, electric vehicle (EV) adoption continues to grow at a robust double-digit pace across segments.
Among two-wheelers, TVS Motor and Honda have gained market share, while Bajaj Auto, Hero MotoCorp and Eicher Motors have lost share. Nuvama attributed Eicher Motors' share loss to waiting periods for key models, including the Bullet 350 and Classic 350.
The brokerage's dealer survey indicates that a Madhya Pradesh Honda dealer expects growth of 3–5% during September–November 2026, compared with 10% in the first half of FY27, citing slower rural demand amid deficient rainfall and lower crop realisations. A Bihar dealer expects Honda's two-wheeler sales to grow 15–18% during the festive period, below the 24% growth recorded between April and August 2026.