Motilal Oswal picks Maruti Suzuki in OEMs, sees promise in M&M and TVS

Motilal Oswal Financial Services (MOFSL) has maintained Maruti Suzuki India (MSIL) as its top pick among Original Equipment Manufacturers (OEMs), while also maintaining a positive stance on Mahindra & Mahindra (M&M) and TVS Motor Company in the auto sector.

 

“MSIL remains our top pick among auto OEMs, with new launches and strong export momentum expected to drive healthy earnings growth. We also like M&M, driven by strong demand for tractors and the robust performance in UVs. In the two-wheeler segment, TVS continues to be a positive pick,” said MOFSL in its report.

 

This comes on the back of the auto companies releasing their sales data for January 2026. According to MOFSL, the demand for vehicles has picked up across segments, buoyed by GST rationalisation, and remains strong even post the festive season. A notable trend has been the increase in demand for entry-level vehicles, both in two-wheelers (2Ws) and passenger vehicles (PVs).

 

 

"Moreover, as OEMs are likely to end 2025 with lean inventories and January 2026 witnessing sustained demand, wholesale demand is expected to stay healthy for the remaining months of 4QFY26," the brokerage added. As the demand continues to recover, it expects discounts in the PV segment to gradually reduce. 

(MOFSL on auto stocks)

                                                                          

                              Passenger vehicles (PVs): According to MOFSL, while Q3 was strong, retail sales in January slowed compared to other segments, as PV players continued offering healthy discounts to sustain demand. Tata Motors Passenger Vehicles (TMPV) stood out, posting a 47 per cent year-on-year (Y-o-Y) growth to 71,100 units, supported by Sierra dispatches and channel inventory normalisation. Retail sales grew 14 per cent Y-o-Y. Mahindra & Mahindra (MM) posted robust UV sales of 63,500 units (up 25.4 per cent Y-o-Y), surpassing estimates of 57,000 units. Hyundai rebounded with a 12 per cent Y-o-Y growth to 73,100 units, driven by a 9.5 per cent Y-o-Y rise in domestic volumes and 14,000 units in exports (up 20.9 per cent Y-o-Y). The Venue and Aura models posted record monthly sales.

 

Two-wheelers (2Ws): The two-wheeler segment continued to witness strong demand in January. TVS Motor Company (TVSL) grew 29 per cent Y-o-Y to 512,000 units, with motorcycles up 26 per cent Y-o-Y, scooters up 30 per cent Y-o-Y, and three-wheelers (3Ws) up 77 per cent Y-o-Y to 17,571 units. Exports were 122,000 units (up 21.1 per cent Y-o-Y), though below estimates of 136,000 units. Hero MotoCorp (HMCL) posted a 26 per cent Y-o-Y growth to 558,000 units, with retail sales up 19 per cent Y-o-Y and exports up 24 per cent Y-o-Y, driven by new market entries and portfolio expansion. Hero’s scooter sales grew 46 per cent Y-o-Y, supported by models like the Destini, Xoom, and VIDA VX2. Royal Enfield (RE) grew 15 per cent Y-o-Y to 104,000 units (below the 110,000-unit estimate), with domestic volumes up 16 per cent Y-o-Y and exports up 5 per cent Y-o-Y. Excluding Bajaj Auto (BJAUT), the three key 2W players posted 26 per cent Y-o-Y growth in wholesale volumes.

 

Commercial vehicles (CVs): In the commercial vehicles (CVs) segment, sales rose 28 per cent Y-o-Y in January despite a high base. Tata Motors CV (TMCV) grew 30 per cent Y-o-Y to 41,500 units, with high commercial vehicle (HCV) sales up 29.3 per cent and light commercial vehicles (LCV) up 30.4 per cent. Ashok Leyland posted a 27 per cent Y-o-Y growth to 21,900 units, while Volvo Eicher Commercial Vehicles (VECV) saw a 24.9 per cent Y-o-Y increase to 10,600 units. Year-to-date volume growth for the top three CV players stands at 12.2 per cent Y-o-Y. MOFSL expects the demand momentum to remain positive, supported by fleet operator profitability and favourable lead indicators.

 

Tractors: Tractor demand, MOFSL said, remains robust, driven by higher reservoir levels, healthy crops, and improved Minimum Support Prices (MSPs). The two listed tractor players posted 47 per cent Y-o-Y growth in January: M&M up 48 per cent Y-o-Y to 40,600 units, and Escorts up 47 per cent Y-o-Y. On a YTD basis, combined tractor sales have grown 28 per cent Y-o-Y.

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