Synopsis: Global brokerages Macquarie and CLSA see strong upside in Indian auto and industrial stocks, citing growth in SUVs, two-wheelers, and favorable macro conditions. Companies like M&M, Tata Motors (PV), Maruti, and Escorts are highlighted for potential gains of upto 64%
Global brokerages Macquarie and CLSA have recently put several Indian equities on their radar, highlighting strong potential upside as markets look beyond short‑term volatility. Their research notes suggest that well‑positioned companies like M&M and Tata Motors’ passenger vehicles and others could offer substantial returns.
These recommendations focus on companies with strong growth prospects, robust fundamentals, and potential market tailwinds in the automotive and industrial sectors. Investors may see these as opportunities to benefit from expected recovery in sales, new product launches, and favorable macro conditions.
Macquarie on the Auto Sector
Macquarie has recently highlighted the auto sector as an area of significant opportunity, driven by structural shifts as he expects the PV (Passenger Vehicle) market shows a clear divergence in growth trends, with SUVs leading the expansion while traditional cars continue to lag behind. Rising consumer preference for larger, feature-rich vehicles and improved financing options have contributed to sustained SUV demand, driving overall PV segment growth.
In the two-wheeler segment, growth remains broad-based, but scooters are outperforming motorcycles. Urbanization, increased short-distance commuting, and convenience factors favor scooters, while motorcycles continue to see steady but slower adoption.
Macquarie’s Ratings and Target Prices
| Stock Name | Target Price (₹) | Rating | Upside Potential (%) |
|---|---|---|---|
| Escorts | 4,314 | Outperform | 50 |
| Uno Minda | 1,439 | Outperform | 40 |
| Maruti Suzuki | 17,449 | Outperform | 42 |
| M&M (Mahindra & Mahindra) | 4,168 | Outperform | 41 |
| Hyundai | 2,506 | Outperform | 34 |
| Hero MotoCorp | 6,674 | Outperform | 32 |
| TVS Motor | 4,339 | Outperform | 28 |
| Tata Motors (PV) | 385 | Neutral | 26 |
| Bajaj Auto | 9,904 | Neutral | 13 |
| Eicher Motors | 7,479 | Neutral | 12 |
| Ashok Leyland | 187 | Neutral | 15 |
CLSA on the Auto Sector
Macquarie has recently highlighted the auto sector as an area of significant opportunity, as it expects the Crude price volatility is expected to weigh heavily on FY27 earnings. If current price levels persist, earnings could see a 30–40% reduction, with past corrections suggesting an additional downside risk of around 15%.
This pressure largely reflects the sensitivity of margins to commodity costs, highlighting the direct link between crude prices and profitability. Companies may struggle to offset this in the near term, keeping FY27 under stress.
Looking ahead, a recovery in margins is likely in FY28, either through easing commodity prices or targeted price hikes. This provides a path for earnings stabilization and underscores the importance of commodity trends in shaping the medium-term outlook.
CLSA’s Ratings and Target Prices
| Stock Name | Target Price (₹) | Rating | Upside Potential (%) |
|---|---|---|---|
| M&M (Mahindra & Mahindra) | 4,448 | Outperform | 50 |
| Bajaj Auto | 10,707 | Outperform | 22 |
| TVS Motor | 3,846 | Outperform | 13 |
| Tata Motors PV | 440 | Outperform | 44 |
| Ashok Leyland | 216 | Outperform | 33 |
| Maruti | 15,961 | Outperform | 30 |
| Eicher Motors | 7,454 | Outperform | 11 |
| Escorts | 3,752 | Outperform | 30 |
| Hero MotoCorp | 5,437 | Hold | 7 |
| Hyundai | 2,652 | Outperform | 42 |
| Tata Motors CV | 648 | Outperform | 64 |
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