Highest Upside

Tata Motors has struck a landmark deal to acquire Iveco Group N.V., aiming to establish a top-tier global player in the commercial vehicles sector.

Tata Motors JLR reported Q1FY26 wholesale volumes of 87,286 units, a 10.7% decrease YoY and 21.7% down from Q4FY25, reflecting the planned wind down of legacy Jaguar models and US import tariffs.

We attended TTMT’s analyst meet to discuss the upcoming demerger, the IVECO acquisition (refer to our note), updates on JLR after the recent cyber-attack.

We attended JLR’s Annual Investor Day meet to understand its outlook and growth strategy. JLR gave guidance for £28bn revenue with 5-7% EBIT margin in FY26 (vs earlier guidance of 10%; FY25: 8.5%); it maintained its interim/long-term guidance of 10%/15%, led by sustained focus on premiumization (growing share of higher-priced models), pricing discipline, and structural cost reduction.

Liquidity at HMIL was sizeable at ?8,579 crore as on March 31, 2025. Besides this average utilisation of the fund-based limit of ?3,637 crore was negligible in the six months through June 2025.

Hyundai Motor India (HMIL) plans to invest a total of INR450b over FY26-30, with 60% to be invested in R&D and 40% in capacity expansion and modernization. It has guided for revenue of INR1t, margin of 11-14% and a dividend payout range of 20-40% during the same period.

Maruti Suzuki’s Q2 standalone EBITDA was flat y/y at Rs44bn, above our Rs38bn estimate, owing higher realisation & other operating income.

Maruti Suzuki (MSIL)’s 2QFY26 PAT was in line, while EBITDA margin came in better than our estimate due to an improved mix.

Market leader in each sub-segment - cars (66.9%), UV (25.8%), vans (90%) Q2FY26 Results: MSIL reported steady performance in Q2FY26. Sales volume for the quarter stood at 5.50 lakh units, up 1.7% YoY. Total operating income for Q2FY26 came in at 42,101 crore with ensuing ASPs at 7.3 lakh/unit, up 5% QoQ. EBITDA margins for the quarter came in at 10.5%, up 10 bps QoQ. Consequent PAT...

We stay positive on Maruti Suzuki India Limited (MSIL), as we expect volumes to regain pace going forward, led by GST rate cuts, festive demand and new launches.

Structural positives: Low car penetration, GST Rationalization: Although India is the world's third largest passenger vehicle market, car penetration still remains low (at ~30 cars per 1000 people) vs. global average, developed economies in the West & China. With rising per capita income, this represents healthy long term growth longevity for domestic PV space with HMIL a clear beneficiary. Further, Government has announced GST 2.0 reforms thereby reducing GST rates for the automobile sector across the segments and value chain. Small cars will now attract...

Focus on next phase from Strength to Scale Hyundai Motor Group. HMIL has for long been the second largest auto OEM in the domestic passenger vehicle market in terms of sales volumes. Its portfolio includes 14 models across major passenger vehicle segments...

We maintain our BUY rating on the stock.

Mahindra & Mahindra (MM)’s 2QFY26 PAT at INR45b was above our estimate due to better-than-expected margins (both from auto and FES segments), as well as higher other income.

The recent reduction in GST rates from 28% to 18% across most segments in the auto sector may inject fresh demand momentum. This is in addition to the recent rationalisation of personal income tax slabs, interest rate cuts and the upcoming Pay Commission revisions.

With new launches in the electric sport utility vehicle (SUV) segment and variant refreshes, the company has maintained its SUV growth guidance. During the festival season, it is expected to ramp up electric vehicle (EV) production, supported by the upcoming launches that will drive revenue growth. GST reductions are also expected to positively impact the automotive and tractor industries by making vehicles and equipment more affordable, thereby spurring industry growth. M&M...

Maruti Suzuki’s Q2 FY26 quarterly performance reflected resilient revenue growth led by strong exports and better realizations, although margin softness persisted due to elevated operating costs and higher raw material pricing pressure.

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