Bullish Auto Sector: PV & 2W to Lead Growth FY26-28 (Nuvama)

Nuvama forecasts a sustained uptrend for India's automotive sector from FY26 to FY28. The report specifically highlights that passenger vehicles (PVs) and two-wheelers (2Ws) are anticipated to grow faster than heavy commercial vehicles (HCVs) and tractors.

This outlook provides a clear positive signal for the Indian auto industry, suggesting robust demand and sales growth for key segments over the next few years. It helps investors identify sub-sectors within auto that are likely to outperform.

Stocks of passenger vehicle manufacturers like MARUTI and M&M, and two-wheeler companies such as HEROMOTOCO, BAJAJ-AUTO, and TVSMOTOR, are likely to see positive sentiment and potential upside. Conversely, companies heavily reliant on HCVs and tractors might see comparatively slower growth, though not necessarily negative impact.

Traders should monitor monthly sales data for PVs and 2Ws for confirmation of this trend. Also, keep an eye on raw material costs and interest rate movements, which can influence auto demand and profitability.

• •India auto wholesales expected to sustain uptrend across segments through FY26–28.
• •Passenger vehicles and two-wheelers expected to outpace heavy commercial vehicles and tractors.
• •Risk flag: Rising fuel prices
• •Risk flag: Interest rate hikes affecting financing
• •Risk flag: Supply chain disruptions