HDFC Securities expects muted earnings for India’s auto sector in Q1

Ather Energy

11/07/2025 09:26

** HDFC Securities expects muted earnings for India's auto sector in Q1 FY26, citing weak demand, rising input costs, and regulatory headwinds

** Brokerage sees TVS TVSM.NS, Eicher EICH.NS, and Mahindra & Mahindra MAHM.NS outperforming on the back of strong product mix and execution, but warns that margins across the manufacturers will be hit

** Two-wheeler and commercial vehicle makers face added pressure from new OBD-2 norms and AC cabin mandates - HDFC Securities

** Auto ancillaries are exposed to global headwinds, with Balkrishna Industries BLKI.NS expected to be hurt by freight costs and Bhuj plant risks

     ** HDFC Securities highlights rare earth magnet shortage as a near-term risk to EV and ICE production, with India's reliance on China adding cost and quality concerns

     ** Adds Ather Energy ATHR.NS and Ashok Leyland ASOK.NS  to top picks, prefers Bharat Forge BFRG.NS for defense exposure, and retains "buy" rating on Maruti MRTI, Hero MotoCorp HROM.NS, and Mahindra

 (Reporting by Rudra Pratap Singh in Bengaluru)

 ((rudrapratap.singh@thomsonreuters.com))