Top Automobile Sector Stocks in India 2023
The automobile industry is one of the fastest-growing sectors. Being a dynamic industry, it contributes greatly to the economy. From cars, bikes and scooters to tractors, there are so many different options available when it comes to automobiles.
In the coming years, this industry is expected to grow exponentially because of the ever-rising consumer demand, infrastructure development, and initiatives taken by the government. Moreover, the industry may move forward with a CAGR of 7%.
With the growth in the automobile industry, all eyes are on the automobile stocks India that are doing tremendously well in the market. Some automobile stocks in India are consistently rising and are expected to do even better this year.
Here are the top auto sector stocks:
Maruti Suzuki India Ltd.
Maruti Suzuki is the largest automobile manufacturer in India. It is one of the well-known auto stocks in India. The company has a market share of 50% or above. While the company is one of the best brands for cars, it is now also at the top of the auto sector shares. Suzuki is about to expand its services in India and abroad both and increase its production capacity as well. From hatchbacks, sedans and SUVs to vans, it offers a wide range of products. Due to its robust distribution of networks and brand equity, it is among the top-performing stocks right now and will only continue to grow in the future.
Tata Motors Ltd.
Next on the list is Tata motors as it is yet another leading automobile manufacturer in India. With a market share of around 12%, the company has a strong commercial presence. It is a leading manufacturer of cars, tractors, buses and trucks. Jaguar Land Rover and Range Rover are some of the main brands of the company. DCVL and Tata Daewoo Auto Ltd are another two major brands that are under this company. Talking about its passenger vehicle segment, sedans, SUVs, and hatchbacks are a growing sector for the company.
Hero MotoCorp Ltd.
Hero MotoCorp Ltd. is a manufacturer of scooters and motorcycles in India. The company has a massive market share of about 40%. Established in 1984, the company has 8.4 billion dollars of market capitalisation. Apart from auto rickshaws and scooters, the company also manufactures engines for companies like Tata Motors, Ford Motor Company and Mahindra and Mahindra. A robust brand equity and distribution network are surely the reasons behind maintaining the top position in the market.
TVS motors is the king of the industry when it comes to motorcycles and scooters in India. Being one of the biggest manufacturers of two-wheelers in the nation, the brand will reach great heights in the coming years. Moreover, the company recorded a constant growth rate of 15% per annum for several years now. The demand for motorcycles or two-wheelers, in general, continues to grow rapidly and its never-ending demand allows the company to boom. Jupiter, a brand that manufactures cars also comes under TVS motors. Even online stores like Amazon and Flipkart deal with TVS vehicles.
Bajaj Auto is the second-largest two-wheeler manufacturer in India. The brand is a household name and for all the right reasons. Established in 1884, the company maintained its park position for decades now. Its presence is now in more than 70 countries with its popular brands like Pulsar, Avenger and Platina. Bajaj Auto owns a 49% stake in the KTM brand’s parent company. Bajaj observed a solid consistency in earnings as its exports account for more than 50% of its sales. The key to the brand’s success is diversifying its operations geographically. It is among the most popular automobile stocks in India.
Eicher Motors leads internationally in the 2-wheelers market segment. Apart from being the holding company of Royal Enfield, the brand manufactures trucks and buses. Also, it is responsible for the sales, after-sales and distribution of Volvo buses in India. Eicher is an entirely debt-free stock and has a market share of 49.2%. Being the manufacturer of premium vehicles, it boasts high operating and net profit margins with great return ratios. Not only this but RE has 2,100 retail outlets across the nation with three production facilities. The two major design centres in the UK and India bring the majority of the revenue of the company.
Mahindra and Mahindra Ltd.
This is a flagship company of the Mahindra group whose primary businesses revolve around farm solutions and mobility products. From two-wheelers, SUVs and commercial vehicles to tractors, the brand offers a wide range of products. With 68 manufacturing facilities across the world, the company also has a strong presence in more than a hundred countries. With a market share of 40%, the brand maintains its leadership position successfully. The company is currently exploring the market and will launch a lot of new series of products in a couple of years. Such aggressive growth plans will create value for the stakeholders. It is safe to say that the brand is expected to boom in the coming years.
Risks in Automobile Stocks
With rising customer demands, the disruptive impact of technology has become a cause of concern. There is tremendous pressure on companies to upgrade and launch innovative products to meet the requirements of the users. Electric vehicles are also a threat to some companies in the industry.
Climate change and sustainability are the buzzwords around which the entire industry is revolving. This factor will bring in new rules for the manufacturers and the phase will be a testing time for the companies. Remaining relevant is also important in these times.
Before investing in the automobile sector stocks, ensure that you are well aware of the risks and challenges. Remember that the performance of these stocks directly correlates to the overall economy of the nation. Try to diversify your portfolio with other investments as well and do your research before investing.
The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.