Tata Motors, Hyundai, Maruti Suzuki: July auto sales preview; stocks to buy

 In its July volume preview note, Nomura said the month saw continued slowdown in demand, with passenger vehicle (PV) and commercial vehicle (CV) volumes likely to remain flat. Two-wheelers (2W) volumes are seen slightly better while tractor sales could emerge as a bright spot, the foreign brokerage said.

Ahead of July sales data, the brokerage is 'Neutral' on shares of Tata Motors and Maruti Suzuki India and 'Buy' on  Mahindra & Mahindra (M&M). The brokearge has 'Neutral' rating on Hero MotoCorp, TVS Motors and Bajaj Auto.

 Among passenger vehicle makers, Maruti Suzuki’s domestic PV wholesales (excluding OE and LCV) are seen be flat YoY at 1,37,000 units in July, supported by channel filling. Nomura expects MSIL’s wholesale market share to have an uptick mont-on-month (MoM) to 39.7 per cent while the retail market share to stay largely flat at 38.7 per cent.

In the case of Mahindra & Mahindra (M&M), Nomura estimated utility vehicle volumes to rise 15 per cent YoY to 48,000 units, with continued support from the production ramp-up of the BE 6, XEV 9e, Thar ROXX and XUV 3XO. M&M is expected to launch three ICE SUVs (two refreshes), two BEVs and two LCVs in FY26E and should continue to benefit from a growing SUV trend in the domestic PV industry, according to management, Nomura said.

In the case of Tata Motors, Nomura said PV sales in July declined 11 per cent YoY to 40,000 units. It expects Hyundai Motor India’s domestic sales to decline by 4 per cent YoY to 47,000 units and exports to rise 6 per cent YoY, leading to its overall volumes declining 1.6 per cent YoY.

Among two-wheelers, Bajaj Auto’s July sales are seen growing 2 per cent YoY to 3,60,000 units. Nomura expects
2W/3W export growth of 17 per cent and 45 per cent YoY, respectively. This may be impacted by lower EV 2W production.

"We expect TVS Motors’ (Neutral rating) domestic volumes to increase by 13 per cent YoY, while exports are likely to be up 23 per cent YoY. With this, overall growth is likely to be up 16 per cent YoY. Hero MotoCorp’s (Neutral) volumes are likely to be at 4,50,000 units, increasing by 22 per cent YoY. HMCL’s exposure to the new ABS regulation remains a key risk to monitor in our view, since it has the largest exposure to the 2W

Auto stocks to buy

Nomura has 'Buy' ratings on six auto and auto ancilliary stocks, where it sees up to 22 per cent upside potential. Here's the complete list: