Travel and commutation are an essential part of our everyday life. Whether it is a short trip to get groceries, work travel, or extended travel for leisure, traveling is everywhere.
Vehicles are needed for such travel, and the most common vehicle type is automobiles. Whether personal cars, private cabs, or buses and trucks, these vehicles are classified as automobiles.
Because the need for automobiles will always be there, the potential for the auto sector is sound. There are many auto companies in India.
Several of these are listed in the stock exchanges of India. Thus, we have done a detailed study and a comprehensive list of the best auto stocks to buy.
Know about the Auto Sector in India
The success of the auto sector relies specifically on demand from its customers. India, the second most populated country with a rising middle class and income levels, provides a good customer base to the auto sector.
India is the world’s 5th largest vehicle market. The sector houses the top automobile companies in India.
The automotive sector in the country comprises all vehicle segments from cycles to scooters and motorcycles, budget cars to premium luxury cars, tractors to trucks, etc.
The companies in this sector cater to automotive needs in various ways – from providing automotive parts to automotive servicing to manufacturing complete vehicles.
This article brings you a list of the top automobile sector stocks.
Top 10 Auto Stocks to Buy in India – List of Best Auto Shares to Buy
We have identified the best auto shares in India and listed them down in order of their market capitalization. The stocks with the highest market cap being ranked first and so on:
Further, we have listed 5 more auto companies in our ‘honorable mentions’ category. The list of top car company shares to buy includes mainly large-cap and mid-cap companies.
These companies serve a broad customer base in a populous country like India; thus, their size is a good indicator of their performance.
Thus, market capitalization has been chosen as the basis for listing down the top auto shares. Market cap is derived by multiplying the market share price of the stock with the total number of outstanding shares of the Company.
Additionally, other key parameters have also been listed for the benefit of investors. We will now elaborate on the critical aspects of each of these selected stocks.
Maruti Suzuki India Ltd. – Best Automobile Stocks in India
Maruti Suzuki Ltd ranks first in the list of best automobile stocks in India. It manufactures automobiles in India. 2001 is its year of incorporation.
The Company was formerly known as Maruti Udyog Ltd before being taken over by a Japanese Automaker, Suzuki Corporation Ltd.
Its headquarters are in Delhi. Its products include several automotive vehicles, mainly passenger cars – 16 types such as hatchbacks, sedans, SUVs, etc.
Apart from manufacturing cars, it also provides automotive servicing. It has sold more than 2.5 crores of vehicles.
The Company does so through 3,500 exclusive car showrooms. The Company also services more than 14.75 lac cars each month.
Maruti Suzuki has its manufacturing facilities at Gurgaon and Manesar. The Company also exports its products to more than 90 countries. Its annual revenue is Rs. 83,000 crores with a PAT of Rs. 7500 crores.
Maruti Suzuki is a large-cap company with a market cap of Rs.2,64,057 crores. It has a high market price of its share, around Rs.8698.
Why to invest in Maruti Suzuki India Ltd. stocks?
The reasons that make this stock the top-ranked amongst auto shares to buy are:
- It is the most common automotive brand for the masses in India. The Company is India’s largest passenger automaker.
- Maruti is not only a common name in India but globally as well as it has a vast footing
- Its CNG vehicles sales are growing at a whopping rate of 50% Y-o-Y
- The Company is highly profitable and has a healthy dividend track record
Tata Motors – Best Car Stocks in India
Achieving the second rank amongst the best car stocks in India is Tata Motors Ltd. Tata Motors is part of the giant Tata Group of companies.
The Company was founded in pre-independence times in 1945. Its headquarters are in Mumbai.
It manufactures several automotive vehicles, including passenger cars, trucks, sports cars, luxury vehicles, and construction equipment.
The Company sells more than 10 lac cars each year. Its annual revenue exceeds 2 lac crores each year. Apart from selling in India, it also sells globally. These countries include the UK, Korea, South Africa, China, Brazil, etc.
Tata Motors has a market capitalization of Rs.1,59,654 crores. Its share price is around Rs.477.
Why to invest in Tata Motors stocks?
- The Company has seen a sharp and fast post-pandemic recovery.
- Tata Motors is also foraying into the electric vehicle space, which is an upcoming segment.
- The Company is working fast towards its vision of being the ‘most aspirational Indian auto brand’ by 2024.
- It constantly innovates in its products and service offerings.
- Tata Motors Stock predictions say that the stock prices will rise in the next few months.
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Mahindra & Mahindra – Most Traded Auto Shares in India
Next on the top car company stocks list are Mahindra and Mahindra Ltd. The Company was incorporated in 1945 as Mahindra and Muhammad. It is part of the larger Mahindra group of companies.
Mahindra and Mahindra have the unique distinction of being the largest producer of specific vehicle segments in India.
It is a leading producer of tractors, manufacturing nearly 4 lac tractors each year. The Company has an annual revenue of Rs.44,574 crores and a profit after tax of more than Rs.4,000 crores.
Mahindra and Mahindra have a market cap of Rs.1,06,218 crores. Its car share price is approximately Rs.850.
Why to invest in Mahindra and Mahindra stocks?
- It has begun producing EVs, which has the potential for exponential growth in long-term investment.
- With the government’s increasing focus on modernizing agriculture, Mahindra and Mahindra, who is a leader in tractor space, is expected to do well.
- It is expanding its production capacity considerably with a fully automated production line at Chakan.
Bajaj Auto – Top Auto Companies in India
Bajaj Auto is a known brand that features amongst the top auto companies in India. It primarily manufactures two-wheelers and three-wheeler vehicles.
It is the no.1 three-wheeler manufacturer in the world.
Bajaj Auto is also the 3rd largest manufacturer of two-wheelers in the world. Bajaj Auto exports its products to more than 79 countries, Apart from domestic sales. It has exported 2.05 Mn units in the last year alone.
The Company has an annual revenue of Rs. Twenty-seven thousand one hundred thirty-three crores, net profits exceed Rs.5,000 crores.
Bajaj Auto has a market capitalization of Rs.1,04,099 crores. Its auto share price is relatively high, trading around Rs.3580.
Why to invest in Bajaj Auto stocks?
- It has a significant market share in the 2-wheeler space – 37% and 3-wheeler space – 41%
- Amongst the first in the country to introduce an electric version of the scooter
- Bajaj Auto relies greatly on R&D. This makes it a very sustainable company. It alone contributed to 41 product launches in the last year itself.
- Bajaj Auto Share Forecast suggests that it has very good future potential.
Eicher Motors Ltd. – Top Motor Vehicle Stocks
Eicher Motors Ltd ranks fifth in India’s top motor vehicle stocks. This Company is the oldest, in business, two-wheeler manufacturer in the country. It manufactured and sold 609,403 motorcycles last year.
The Company achieved this through more than 2000+ studio stores and dealerships in the country.
It also has a robust global network of more than 750 retail outlets across more than 60 countries. It has 3 manufacturing facilities – all near Chennai. Royal Enfield is one of the most popular brands of the Company.
The Company has an annual revenue of Rs.9000 crores, with a net profit of Rs.20+ crores. Eicher Motors has a market cap of Rs.74,953 crores. Its motor vehicle share price is around Rs.2706.
Why to invest in Eicher Motors Ltd. stocks?
- It has a rich and stable legacy of more than 120 years
- It has a monopolistic position in the market – market share of 94% in India’s mid-size motorcycle segment
- Also, it has a consistent focus on innovation in its products as well as its service
- The company has a strong balance sheet which attracts all types of Investors.
Motherson Sumi Systems – Top 10 Auto Stocks
Next on the list of top 10 auto stocks is Motherson Sumi Systems. This Company is a specialized, full-system solutions provider catering to customers across the automotive sector. It is a back-end provider to the auto sector.
Its product portfolio includes wiring harnesses, vision systems, modules and polymers, precision metals, and solutions.
It has 230 manufacturing facilities that are spread across 40 countries. The Company has an annual revenue of USD 8.2 Bn.
Motherson Sumi Systems has a market cap of Rs.70,723 crores. Its machine share price trades at around Rs.156.
Why to invest in Motherson Sumi Systems stocks?
- It has grown at a steady and high CAGR of 33% over the last 20 years.
- The Company has chalked out a Vision 2025. It’s looking to significantly increase its revenue with a 40% ROCE for its investors
- It focuses on unique innovations such as smart vehicle dynamics, immersive customer experience, great manufacturing, etc.
Hero MotoCorp Ltd. – Best Motorcycle Stocks to Buy
The next on the list of best motorcycle stocks to buy is Hero MotoCorp Ltd. Hero MotoCorp is a leading manufacturer of motorcycles and scooters.
The Company also manufactures and sells spare parts for its vehicles. It reached the milestone of production and sale of 100 million units in 2021.
Its domestic network consists of 270 plus dealers with more than 9000 dealer touchpoints.
Apart from domestic sales, the Company also exports its products to more than 40 countries. Its annual revenue is Rs. 30,800 crores with a net profit of Rs.3000 crores.
Hero MotoCorp has a market cap of Rs.53,594 crores. Its motorcycle shares in India are approximately Rs.2670.
Why to invest in Hero MotoCorp Ltd stocks?
- It is focusing on the growing premium segment in the country. It registered a growth of 58% in the premium segment of its motorcycles in the last year alone.
- The Company constantly focuses on innovation and meeting the latest customer demands. It had 13 new product launches in 2021
- It has a healthy profit margin of more than 10%
Bosch Ltd. – Top Auto Stocks to Buy
The following list of top auto stocks to buy is Bosch Ltd. The Company manufactures automotive parts and provides technology solutions for the automotive sector.
Its products include passenger car batteries, nickel spark plugs, and wiper blades. 1951 is the year of incorporation of the Company.
The Company has 16 manufacturing sites and 7 research and development centers. Its annual revenue is Rs.10,000 crores.
Bosch Ltd has a market cap of Rs. 47,215 crores. Its share price is around Rs.15,951.
Why to invest in Bosch Ltd. stocks?
- The Company is a technology focus and technology-driven Company. This makes it stock for the future.
- The Company also focuses on generating clean energy as its ancillary business. This is also an upcoming market segment.
- According to Bosch Ltd Stock Prediction, it is expected to provide decent returns.
Sona BLW Precision – Best Auto Companies in India
Taking the ninth position in the list of best auto companies in India is Sona BLW Precision Forgings Ltd. The Company is a top manufacturer of automotive parts and components.
1995 is its year of establishment. It is a global leader in the supply of parts to the electric vehicle market.
The Company’s product portfolio includes starters, generators, alternators, gears, couplings, etc. 25% of its revenue comes from India, with the balance revenue share coming from exports to Europe and America.
Its annual revenue is Rs.1566 crores with a profit after tax of more than 200 crores. Sona BLW Precision has a market cap of Rs.3915 crores. Its share price is reasonably priced, trading at around Rs.56.
Why to invest in Sona BLW Precision stocks?
- It is a fast-growing company. It has clocked a 51% growth in its revenue in the last year alone.
- Sona BLW is innovating its product line to meet the needs of the upcoming EV segment in the Indian share market.
- Also, it relies more on exports for its revenue. This means it earns more from higher-paying developed economies and customers.
Balkrishna Industries – Automobile Shares to Buy
Rounding off the list of automobile shares to buy is Balkrishna Industries Ltd. The Company primarily manufactures tires for various automotive vehicles.
Its main product is a specialty tire called Off-Highway Tires. These tires are used by vehicles in agricultural, industrial, construction, and such sectors.
The Company also exports its products to several countries. It enjoys the status of a 4-star export house. Its annual revenue is nearly Rs.6000 crores with profitability of more than 1200 crores.
The Company has a market cap of Rs.36,998 crores. Its share price is relatively high, around Rs.1905.
Why to invest in Balkrishna Industries stocks?
- It has a unique product offering, which has less competition in the country, and thus the Company enjoys a semi-monopolistic status in the country.
- It is on a significant expansion drive with at least 5 new manufacturing projects underway. This is expected to increase its production and sales substantially.
- Balkrishna Industries Share Forecast suggests that it has very good future potential.
Ashok Leyland – Vehicle Stocks to Buy
The first Company to make it to the honorable mentions list of heavy vehicle stocks to buy is Ashok Leyland Ltd. It manufactures heavy commercial vehicles.
The Company is part of the larger Hinduja group. It has its headquarters in Chennai. Its product portfolio includes trucks, defense vehicles, buses, and diesel engines.
With the Make in India movement picking pace, the Company’s product demand is expected to increase substantially.
It has a market cap of Rs. 36,591 crores. Its share price trades around Rs.124.
Bharat Forge – Auto Companies’ Stocks to Buy
Bharat Forge Ltd features next in our honorable mentions category of auto Companies’ stocks to buy. It is a leading auto company and manufactures parts for the automotive industry.
1961 is the year of the formation of the Company. It has a production output of more than 1.6 lac metric tonnes annually.
Bharat Forge has a market cap of Rs.32,742 crores, with its share price around Rs. 704. A large part of its clientele is the railways and defense sector. This lends stability to the Company.
Tube Investments – Automobile Companies’ Shares to Buy
Next in the list of honorable mentions of automobile companies’ shares to buy is Tube Investments of India Ltd.
The Company’s year of incorporation is 1949. It manufactures bicycles and its products such as chains, tires, etc. The Company has an annual income of over Rs.4000 crores.
Tube Investments has a market cap of Rs.30,876 crores. Its share price is trading around Rs.1574. Shifting its focus to the electric segment means the Company has a bright future ahead.
MRF – Top Auto Companies in India
MRF Tyres Ltd is also amongst the top auto companies in India. This Company’s business is to manufacture tires used across vehicle types.
MRF Tyres is the largest tire manufacturer in the country and the sixth-largest globally. Its head office is in Chennai. The Company’s annual revenue is Rs.16,373 crores.
The Company has a market cap of Rs.27,977 crores. Its share price is extremely high at around Rs.65,803.
Minda Industries – Motor Vehicle Stocks in India
The last in our list of motor vehicle stocks in India is Minda Industries Ltd. The Company manufactures parts and components for the automotive industry.
Its products include switches, lighting, batteries, etc. Its manufacturing plant is located at Chakan, Pune. Market capitalization is Rs.27,368 crores, and its share price trades around Rs.940.
How to find Auto stocks for trading?
Armed with detailed information on all 15 selected stocks, you can now consider trading in auto stocks.
Investors may, however, wish to narrow down this list further and choose 2-3 companies to invest in from one particular sector.
This is important for the diversification of your portfolio. Accordingly, we have specified certain parameters basis which you can analyze and select specific auto stocks:
The Company’s financial health – A profitable and well-managed debt company can be considered financially healthy. You can download the companies’ annual reports to gauge their financial condition.
P/E ratio – A fair valued stock is more beneficial for investors. P/E ratio is a good indicator of the market value of a stock vis-à-vis its actual value
Relevant sectoral news – The automotive sector is seeing innovations and changes frequently from government promotional measures to EV innovations. Being up to date with these changes can help choose the correct stock.
How to invest in Auto sector stocks?
To invest in automobile stocks, there is one most basic requirement. You must have a Demat account as well as an active trading account.
This is necessary as shares today are only held and traded in Demat form. A Demat account can be opened with any good broker of your choice. KYC documentation is a must for this.
Once this is done, you can access your Demat account through the provided login credentials. Once logged in, you can track stocks, access research reports, and monitor your portfolio performance.
Top Auto Companies in India – Conclusion
The auto sector is anticipating further high growth and is expected to jump from being the 5th largest to the 3rd largest vehicle market globally.
This dramatically increases the potential for growth for the top auto companies in India. Furthermore, this sector is witnessing a new and fast-growing innovation – electric vehicles.
Those companies that can keep pace with this changing customer demand for clean-green vehicles will sustain better in the years to come.
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