India’s Top Auto Stocks: Analysts expect the auto industry to boom again in India after years of drought. Falling unemployment, rising incomes, and a rapid expansion in demand for credit are likely to boost car sales. Amid these big profit potential expectations, let’s take a look at the top Indian auto stocks for 2023 that investors can add to their watchlist.
But before rushing to the list itself, let’s reserve space for a quick introduction to the state of the Indian automotive industry.
Overview of the Indian Automotive Industry
Over the past five years, the automotive sector has experienced contraction across all segments. The following data from the Indian Automobile Manufacturers Association highlights tough sales figures over the past few years.
(hundreds of thousands)
Category | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22 |
Passenger car (PV) | 40.20 | 40.28 | 34.25 | 30.62 | 36.51 |
PV – YoY Growth / Degrowth (%) | 5.75% | 0.20% | -14.99% | -10.58% | 19.22% |
Commercial Vehicle (CV) | 8.95 | 11.12 | 7.57 | 6.25 | 8.06 |
CV – YoY Growth / Degrowth (%) | 10.51% | 24.23% | -31.97% | -17.42% | 28.90% |
Tricycle (3-W) | 10.22 | 12.69 | 11.33 | 6.15 | 7.58 |
3-W – YoY Growth / Degrowth (%) | 30.43% | 24.13% | -10.71% | -45.75% | 23.34% |
Motorcycle (2-W) | 231.55 | 245.00 | 210.33 | 183.50 | 177.15 |
2-W – YoY Growth / Degrowth (%) | 16.16% | 5.81% | -14.15% | -12.76% | -3.46% |
However, there is a visible green glimmer as PV, CV and tricycle sales increased by 19.22%, 28.90% and 23.34% respectively in fiscal year 2021-22. Rising disposable incomes, improving monsoons, moderating inflation, stable fuel prices, and lower commodity costs will drive growth for the Indian automotive sector in the coming years.
India’s Top Auto Stocks 2023
Let’s move forward to know the top auto stocks in India in 2023.
top auto stocks in india #1 – Maruti Suzuki India
CMP | ¥8,305.0 | Market Capitalization (Cr.) | £250,000 |
EPS | 201 yen | price earnings ratio | 41.4 |
RoCE | 8.95% | egg | 7.25% |
face value | ¥5.0 | book value | ¥1,893 |
promoter holding | 56.4% | price to book value | 4.39 |
debt to equity | 0.01 | dividend yield | 0.73% |
net profit margin | 4.43% | Operating margin | 6.51% |
Maruti Suzuki India (MSIL) was incorporated as Maruti Udyog in 1981 by the Government of India. Suzuki Motor Corporation (SMC) was then the first minor supplier of vehicles sold domestically. SMC increased its stake over the years, and by 2013 he had increased his ownership to 56.4%.
Maruti has become India’s largest passenger car manufacturer with a combined production capacity of approximately 2.25 million vehicles per year. The sales volume in FY2010 is 1.65 million units. Market share in November 2022 he was 41.30%.
Its product portfolio includes top-selling names such as Baleno, Ignis, Ciaz, WagonR, Dzire and Swift.
The company exports cars to over 100 countries around the world. Dzire, Baleno and Swift were the top three export models in the most recent fiscal year.
It has allocated a huge investment of Rs 1,040 crore towards the production of EVs and batteries. This is in line with the company’s plans to roll out electric vehicles in India by 2025.
MSIL is a debt free stock and has consistently paid over 30% dividends over the past six years. The turnover for FY22 was Rs 88,330 and the profit was Rs 3,880 for him.
top auto stocks in india #2 – Mahindra & Mahindra
CMP | ¥1,234 | Market Capitalization (Cr.) | £155,000 |
EPS | 74 yen | price earnings ratio | 18.4 |
RoCE | 11% | egg | 14.2% |
face value | ¥5.0 | book value | ¥406 |
promoter holding | 19.4% | price to book value | 3.04 |
debt to equity | 1.65 | dividend yield | 0.94% |
net profit margin | 7.69% | Operating margin | 16.30% |
Mahindra & Mahindra Limited (M&M), part of the Mahindra Group led by Anand Mahindra, is one of India’s largest automakers. It produces a wide range of vehicles including passenger cars (SUVs), light, medium and heavy commercial vehicles, agricultural machinery and buses.
Scorpio, XUV 700, Thar, Bolero, Blazo, Cruzio, Alfa and Treo are some of the car company’s top brands.
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The company’s 20 manufacturing plants generated sales of 455,570 automobiles and 354,698 agricultural equipment units in 2022. The image below shows M&M’s manufacturing operations across India.
In addition to vehicle production, M&M is also involved in the vehicle financing business through its subsidiary Mahindra & Mahindra Financial Services. More recently, it has branched out into other product types such as personal loans, mortgages and insurance.
Additionally, through various subsidiaries, M&M has a presence in hospitality, infrastructure, retail, logistics, steel trading and processing, IT business, and various other industries.
top auto stocks in india #3 – Tata Motors
CMP | ¥394 | Market Capitalization (Cr.) | £140,000 |
EPS | -¥22.19 | price earnings ratio | -15.4 |
RoCE | 1.4% | egg | 22.3% |
face value | ¥2.0 | book value | 78.8 yen |
promoter holding | 46.4% | price to book value | Five |
debt to equity | 5.52 | dividend yield | 0.00% |
net profit margin | -Four% | Operating margin | 8.8% |
Part of the software conglomerate Tata Group, Tata Motors (TaMo) is a leading automobile manufacturer with an international footprint. It has a presence across the entire product range including passenger cars, luxury vehicles, SUVs, buses, trucks and defense vehicles.
TaMo was founded in 1945, initially manufacturing locomotives and other engineering products. Slowly, it branched out into manufacturing commercial vehicles, passenger cars, and more.
Over the years, Tata’s automotive division has grown both organically and inorganically, acquiring UK-based Jaguar and Land Rover as well as South Korean trucking company Daewoo.
But it hasn’t been smooth sailing for Tata’s automotive division. It has suffered significant losses since 2019 due to expensive acquisitions and declining market share. It wasn’t until fiscal 2021 and fiscal 2022 that we were able to contain the rise in commodity costs and market share decline.
Tata Motors Ltd. Revenue Segments
As part of a recent sale plan, the Tata Motors board is considering listing its subsidiary, Tata Technologies. Tata Tech. We provide technology solutions to the automotive, industrial machinery, aerospace, and adjacent engineering and manufacturing segments.
top auto stocks in india #4 – Badjayiot
CMP | ¥3,591 | Market Capitalization (Cr.) | ¥105,000 |
EPS | 202 yen | price earnings ratio | 18.6 |
RoCE | 23.4% | egg | 19.0% |
face value | ¥10.0 | book value | 900 yen |
promoter holding | 54.8% | price to book value | 3.99 |
debt to equity | 0.0 | dividend yield | 3.90% |
net profit margin | 16.4% | Operating margin | 15.9% |
Bajaj Auto was founded by Jamnalal Bajaj in the mid-1940s. The company initially imported and sold two-wheeled and three-wheeled vehicles in the country. In the late 1950s, the company acquired a manufacturing license and started producing scooters.
Bajaj Auto has grown to be the world’s most valuable two- and three-wheeler company, with operations in over 70 countries. It manufactures famous motorcycle brands such as Pulsar, Avenger, Platinum and Bajaj RE 3-wheeler auto.
In addition, Bajaj Auto owns a 49.9% stake in the parent company of sports bike manufacturer KTM Group. At his Maharashtra factory he builds KTM and Husqvarna motorcycles and exports them all over the world.
Despite the industry downturn, the company’s domestic motorcycle market share increased from 15.7% in FY2018 to 18.2% in FY2022. Likewise, in the last three years he has captured the market for the three-wheeler sub-segment.
The effect can be seen in Bajaj’s revenue, which has consistently increased from INR 4,219 million in FY2018 to INR 6,166 crore in FY22 (excluding FY21). In addition, geographical diversification has led to stable earnings, with exports accounting for more than 50% of his sales.
top auto stocks in india #5 – Eicher Motors
CMP | ¥3,200 | Market Capitalization (Cr.) | ¥87,500 |
EPS | ¥85.40 | price earnings ratio | 37.50 |
RoCE | 18.3% | egg | 14.0% |
face value | ¥1.0 | book value | ¥486.00 |
promoter holding | 49.2% | price to book value | 6.59 |
debt to equity | 0.01 | dividend yield | 0.66% |
net profit margin | 16.3% | Operating margin | 21.2% |
Eicher Motors, the holding company of the renowned Royal Enfield (RE), is an international leader in the midsize two-wheeler segment (250cc to 750cc). In addition to this, it manufactures trucks and buses in India and also sells, distributes and after-sales services for Volvo buses.
Since its founding in 1948, Eicher Motors has gone through a change of ownership, the sale of its tractor and engine business, the acquisition and subsequent merger of Royal Enfield, and a joint venture with the Volvo Group.
Eicher sold 5.95 million motorcycles in its 22nd fiscal year and holds a 90% market share in the medium-duty motorcycle segment in India. Additionally, through the joint venture, 57,077 vehicles have been sold, strengthening his 29.3% share in the light and medium CV segments in India.
RE has over 2,100 retail outlets and 3 production facilities across India. He has two design centers in the UK and India, which contribute the majority of Eicher’s revenue.
Eicher is a debt free company with 49.2% owned by the promoter. It has high operating and net profit margins and a sufficient return rate.
List of Top Indian Auto Stocks for 2023
We have seen the top 5 Indian auto stocks for 2023 above. The list below shows more such strains.
company name | CMP (Rupee) | Market Capitalization (Rs Cr) |
---|---|---|
maruti suzuki india | 8,305 | 250,000 |
Mahindra & Mahindra | 1,234 | 155,000 |
Tata Motors | 394 | 140,000 |
bajaj eut | 3,591 | 105,000 |
eicher motors | 3,200 | 87,500 |
Hero Moto Corp | 2,638 | 53,000 |
TVS Motor Company | 1,011 | 48,000 |
Ashok Leyland | 138 | 41,500 |
escort kubota | 2,013 | 26,500 |
The conclusion is
That concludes our article on top Indian auto stocks for 2023. Focusing on a sector in anticipation of potential profits from an industrial boom is considered a good strategy. However, we should be bullish about how well we understand the sector.
Do you think the autoboom is coming or is it still some time away? Let us know in the comments below.
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Vikalp Mishra is a Commerce graduate from the University of Delhi. He likes to write about finance, money and business. He is a voracious reader with a genuine interest in investing. Please send an email to vikalp.mishra@tradebrains.in.
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