Updated Mar 17, 2026 17:08 IST
Auto Stocks: The auto index has fallen by about 12-13% so far this year, which is more than the total fall of the market…
highlights
- Nifty Auto Index has fallen by 12-13% so far this year.
- The valuation of many stocks in the auto sector has become more attractive than before.
- The brokerage has given a target of up to 46% upside on 14 stocks of the auto sector.
Prices low but risks remain
According to the report, the auto index has fallen by about 12-13% so far this year, which is more than the overall decline of the market. Due to this decline, shares of many auto companies have come around their pre-GST cut levels. This is the reason why many analysts are now considering it as a ‘selective buying opportunity’.
However, the picture is not so simple. Crude oil prices have reached above $100 per barrel, due to which expenses like rubber, plastic and transport are increasing. This can have a direct impact on the margins of companies.
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Brokerages keeping an eye on these 14 auto stocks
A total of 14 auto and auto component companies are covered in the report, including many big names.
The target price of Maruti Suzuki has been kept at Rs 18,245, which shows an upside of about 43%. Mahindra & Mahindra has a target of Rs 4,275, i.e. a potential upside of about 41%. Ashok Leyland (Rs 218, 26% upside), Bajaj Auto (Rs 10,855, 20%), Eicher Motors (Rs 8,225, 21%) and Hero MotoCorp (Rs 6,598, 25%) are also considered in strong positions. TVS Motor has a target of Rs 3,762 (11%), while stocks like Hyundai Motor India and Balkrishna Industries see limited upside, around 4% only.
| Company Name | Target Price (₹) | Potential Upside (%) |
| Maruti Suzuki | 18,245 | 43% |
| Mahindra & Mahindra | 4,275 | 41% |
| Ashok Leyland | 218 | 26% |
| Bajaj Auto | 10,855 | 20% |
| Eicher Motors | 8,225 | 21% |
| Hero MotoCorp | 6,598 | 25% |
| TVS Motor | 3,762 | 11% |
| Sansera Engineering | 2,239 | 10% |
| Suprajit Engineering | 489 | 20% |
| Apollo Tires | 492 | 19% |
| CEAT | 4,334 | 27% |
| Balkrishna Industries | 2,262 | 4% |
| Hyundai Motor India | 2,052 | 4% |
| ASK Automotive | 601 | 47% |
In the auto component segment, ASK Automotive looks the most attractive, with an upside of up to 47%. Suprajit Engineering (20%), Sansera Engineering (10%), Apollo Tires (19%) and CEAT (27%) also emerge as good options.
Demand is strong, but supply and cost are the biggest threats
The biggest strength of the sector is still demand. A good jump has been seen in auto retail sales after the GST cut. But on the other hand, there is a threat to the supply chain due to uncertainty regarding LNG supply and Middle East tension. If gas shortage increases, the impact on production may be visible after May 2026. Smaller suppliers may be particularly affected, as they have limited options for switching fuels.
Apart from this, the share of CNG vehicles is also big. If CNG supply is affected, the demand pattern may change, which will affect the sales of companies.
Margin pressure, but recovery possible in the long term
History shows that when crude oil remains above $100 for a long time, the margins of auto companies can fall by 2-4%. However, companies overcome this pressure over time by raising prices and improving operating efficiency. That means there are challenges in the short term, but the long term story is still intact.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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