Jefferies picks its darling stocks in India’s auto mkt

Meanwhile, the Economic Times daily newspaper is available online now.

Key points

• Top Trending Stocks: SBI Share Cost, Axis Bank Share Rate, HDFC Bank Share Cost, Infosys Share Rate, Wipro Share Cost, NTPC Share Rate.
• Jefferies' India autos team has highlighted TVS Motor Firm and Eicher Motors as its top "Purchase" picks in the segment.
• Eicher motorstvs motor companyhyundai motor indiatata motors passenger vehiclesJefferies auto stocksTVS Motor share priceEicher Motors share priceTata Motors PV.
• Power shift, a déjà vu: Air India could be new CEO's toughest flight yet.
• The Economic Times daily newspaper is available online now.

Meanwhile, the Economic Times daily newspaper is available online now. Jefferies favours two-wheeler stocks over four-wheeler stocks as earnings gap widens. ETMarkets.comLast Updated: Aug 20, 2026, 04: 36: 00 PM IST.

Jefferies prefers two-wheeler stocks over passenger vehicle makers, citing stronger volume expansion, resilient margins and improving earnings. While Tata Motors Passenger Vehicles and Hyundai Motor India carry Underperform ratings against the backdrop of rising competition, higher discounts and a weaker earnings outlook, TVS Motor Firm and Eicher Motors remain its top picks.

Jefferies has maintained a constructive view on India's automobile sector while firmly preferring two-wheeler manufacturers over passenger vehicle makers, citing a widening divergence in profitability and pricing power. Top picks and rating downgrades.

Jefferies' India autos team has highlighted TVS Motor Firm and Eicher Motors as its top "Purchase" picks in the segment. In contrast, the foreign brokerage has assigned "Underperform" ratings to Tata Motors Passenger Vehicles (TMPV) and Hyundai Motor India, reflecting ongoing margin risks and earnings downgrades for four-wheeler original equipment manufacturers (OEMs). Divergent operational performance The preference comes on the back of starkly contrasting operational performances during the June quarter. Throughout Jefferies' two-wheeler coverage universe, combined sales volumes rose 26% year-on-year, driving a robust 39% surge in earnings before interest and taxes (EBIT). For context, the two-wheeler space demonstrated effective cost pass-through to customers and disciplined cost controls, allowing operating margins to remain resilient despite elevated raw material costs. Live Events.

Meanwhile, the passenger vehicle segment presented a vastly different picture. Despite delivering a 25% year-on-year expansion in combined volumes throughout Hyundai Motor India, Maruti Suzuki, Mahindra & Mahindra, and Tata Motors PV, EBIT plunged 15% year-on-year. The earnings drop was driven by higher competitive intensity, rose discounting, and an inability to fully pass on input cost pressures. Earnings revisions and street sentiment Street estimates are rapidly reflecting this two-speed performance. After minor cuts earlier in the year, consensus FY27 earnings per share (EPS) estimates for two-wheeler makers have risen by an average of 4%. Four-wheeler earnings estimates, by contrast, have seen continuous downward revisions, with FY27 EPS projections trimmed by regarding 6% in the September quarter so far. Stock returns and market outlook Stock performance throughout the calendar year mirrors this operational divide. While major four-wheeler stocks like Maruti Suzuki and Tata Motors PV have lagged behind the broader market.: Why Zerodha's Nithin Kamath wants fintech founders to rethink trading in the age of AI Looking ahead, Jefferies expects two-wheeler manufacturers to continue benefiting from a cyclical demand recovery in domestic markets and healthy export volumes, two-wheeler stocks have seen steady gains, led by Bajaj Auto, TVS Motor Firm, and Eicher Motors. While commodity cost volatility and high base effects remain key risks for the entire sector, two-wheelers are significantly better positioned to deliver superior operating leverage and steady EPS expansion over the medium term. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times).

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For now, jefferies picks its darling stocks in India's auto mkt remains the part of the story worth watching, and further updates are likely as more details are confirmed.