Top 10 Best Auto Sector Stocks in India by Market Cap

The Indian auto industry is one of the largest and most dynamic sectors in the country, contributing significantly to its GDP. With the push towards electric vehicles (EVs), increasing consumer demand, and government policies favoring domestic manufacturing, auto sector stocks have gained considerable attention from investors. This blog will highlight the top 10 best auto sector stocks in India based on market capitalization, giving you an insight into the companies leading this space.

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What is the Auto Sector?

The automotive industry is a vast industry that includes companies that design, develop, manufacture, market, and sell motor vehicles and auto parts. It plays an important role in the economies of many nations, being a significant contributor to GDP. This industry drives innovation, creates jobs, and meets the transportation needs of a growing global population, reflecting its importance on both economic and societal levels.

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What are the Indices reflecting Auto Sector companies?

Automobile companies in India are measured along with specific indices that reflect the overall performance of the sector. The two main indices are:

• Nifty Auto Index: Nifty Auto is a sector-specific index that focuses on the automotive industry. It includes companies involved in the manufacturing and marketing of automobiles, auto components, and auto accessories. This allows investors to track the performance of the automotive sector as a whole.
• BSE Auto Index: The BSE Auto Index tracks the performance of automobile-related companies listed on the Bombay Stock Exchange (BSE). It includes a range of companies from passenger vehicles, commercial vehicles, two-wheelers, and auto parts manufacturing sectors.

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List of Top 10 Best Auto Sector Stocks in India 

Key Details of Top 10 Best Auto Sector Companies in India 

1. Maruti Suzuki India Ltd

Maruti Suzuki is India’s largest passenger car manufacturer, dominating the industry with over 40% market share. The company, a subsidiary of Suzuki Motor Corporation, offers a wide range of vehicles, including hatchbacks, sedans, SUVs, and more. Maruti Suzuki is known for its cost-effective and fuel-efficient cars, which cater to the mass market. With plans to enter the electric vehicle (EV) space and continuous upgrades to its product lineup, Maruti Suzuki is set to maintain its leadership in the Indian auto sector.

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2. Tata Motors Ltd

Tata Motors is one of the most diversified automotive companies in India, manufacturing both commercial and passenger vehicles. It owns the prestigious Jaguar Land Rover (JLR) brand, which has helped it strengthen its international presence. Tata Motors is also a frontrunner in the electric vehicle space in India, with the Tata Nexon EV being one of the best-selling EVs in the country. The company’s focus on sustainability and innovation is reshaping its business to be future-ready.

3. Mahindra and Mahindra Ltd

Mahindra & Mahindra (M&M) is a diversified auto company known for its leadership in the utility vehicle and tractor segments. The company has a strong presence in rural markets with its rugged SUVs and is the largest tractor manufacturer in the world. M&M is also heavily investing in electric vehicles and recently launched its all-electric Mahindra eVerito. Its presence in the agricultural sector, combined with the expanding EV portfolio, positions the company well for future growth.

4. Bajaj Auto Ltd

Bajaj Auto is India’s leading two-wheeler and three-wheeler manufacturer, with a significant presence in international markets. The company is well-known for its performance-oriented motorcycles, including the Pulsar series, and is a leader in the export market, with over 70 countries in its portfolio. Bajaj Auto is also exploring electric two-wheelers, having launched its electric scooter, the Bajaj Chetak.

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5. Eicher Motors Ltd

Eicher Motors is best known for its iconic motorcycle brand, Royal Enfield, which has a cult following in India and abroad. The company also has a strong presence in the commercial vehicle segment through its joint venture with Volvo. Royal Enfield’s legacy, combined with its expansion into international markets, makes Eicher Motors a solid investment in the premium motorcycle space.

6. TVS Motor Company Ltd

TVS Motor Company is a major player in India’s two-wheeler segment, offering a range of motorcycles, scooters, and mopeds. The company has a significant presence in both urban and rural markets. TVS is also expanding its electric vehicle portfolio, with the TVS iQube electric scooter gaining traction. It is also focusing on global expansion, particularly in developing markets.

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7. Hero MotoCorp Ltd

Hero MotoCorp is the world’s largest two-wheeler manufacturer, offering a wide range of motorcycles and scooters. The company is known for its fuel-efficient and affordable vehicles, making it the preferred choice for millions of Indian consumers. Hero MotoCorp is also focusing on electric mobility, partnering with global players to develop its electric two-wheeler portfolio.

8. Ashok Leyland Ltd.

Ashok Leyland is one of India’s largest manufacturers of commercial vehicles, including trucks, buses, and defense vehicles. The company has been instrumental in India’s logistics and public transportation sectors. Ashok Leyland is also actively involved in developing electric commercial vehicles and is well-positioned to benefit from the government’s push for electric mobility in public transport.

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9. Force Motors Ltd.

Force Motors is known for its commercial vehicles, passenger carriers, and defense vehicles. The company has a long-standing relationship with the Indian government for supplying vehicles to the defense sector. Force Motors also manufactures engines for leading global automotive brands, adding a layer of diversification to its business.

10. SML Isuzu Ltd.

SML Isuzu focuses on manufacturing light commercial vehicles (LCVs) and buses in India. The company’s collaboration with Japan’s Isuzu Motors brings technological advancements to its products. SML Isuzu is a niche player in the Indian market, catering to the growing demand for LCVs in logistics and passenger transport.

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Why invest in an Auto Sector Company?

• Diversification of the Portfolio : Adding Auto sector stocks to your investment  portfolio can help diversify investments, reducing risk and providing balance. Diversification across different sectors helps protect against market changes and results in more consistent returns over time.
• Growth Potential: The auto industry has a great history of growth due to the increasing global population and rising demand for transportation and vehicles , especially in big and growing markets. This growth can benefit investors by offering great returns.
• Technological Innovation: Auto companies in India are increasingly focusing on integrating advanced technology into their vehicles, such as connected car solutions, autonomous driving features, and more efficient internal combustion engines. These innovations drive demand and contribute to long-term growth and potentially increase an investor’s wealth.
• Rising Domestic Demand: India’s expanding middle class, coupled with rising disposable incomes, has spurred demand for automobiles across categories, from entry-level cars to luxury SUVs. The increased preference for personal mobility post-pandemic, combined with the expanding rural market, has led to a surge in the sale of two-wheelers, cars, and commercial vehicles.

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Wrapping Up

Investing in India’s auto sector presents diverse opportunities, especially with the industry’s shift towards electric vehicles and growing domestic demand. Maruti Suzuki, Tata Motors, and Mahindra & Mahindra lead the market, while companies like Bajaj Auto and Hero MotoCorp offer potential in the two-wheeler and EV segments. Whether you are looking for growth in passenger vehicles, two-wheelers, or commercial vehicles, India’s auto sector has a wide array of investment options to choose from.

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Disclaimer: This blog has been written exclusively for educational purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. SBNRI does not intend to predict future returns, please read all related documents before investing.

FAQs

Which is the No 1 automobile industry in India? 

Maruti Suzuki is the no 1 automobile company in India at present.

Which is the biggest car company in India? 

Tata Motors, Maruti Suzuki, Hyundai, Mahindra & Mahindra, Kia, Honda, Renault are some of the biggest car company in India offering a range of car options from hatchback, compact SUVs, SUVs, sedan to more.

Which is the largest auto stock in India by market cap?

Currently, Maruti Suzuki India Ltd ranks as the largest auto stock in India by market cap. It is well-known for its wide range of passenger vehicles and strong sales across the country.

What factors should I consider when investing in auto sector stocks?

Key factors include market share, financial health, technological advancements (especially in electric vehicles), government policies like the PLI scheme, and growth in domestic and export markets.

Why is it a good time to invest in the Indian auto sector?

The Indian auto sector is benefiting from the push toward electric vehicles, increasing demand for commercial and passenger vehicles, and government incentives to boost manufacturing​.

How are electric vehicles (EVs) influencing auto sector stocks?

Electric vehicles are driving innovation and investment in the auto sector. Companies like Tata Motors and Mahindra are increasingly focusing on EVs, which are expected to shape the future of the industry.

Which Indian auto companies have strong export markets?

Companies like Bajaj Auto and TVS Motor are leading exporters in the two-wheeler and three-wheeler markets. Their strong presence in international markets helps boost their financial performance.

What is the impact of government initiatives on auto sector stocks?

The government’s Production-Linked Incentive (PLI) Scheme provides significant incentives to promote local manufacturing and innovation in automotive technology, particularly in electric and clean energy vehicles​.

What are some risks of investing in the auto sector?

Risks include fluctuating demand, rising raw material costs, competition from global and domestic players, and evolving regulations around emissions and environmental standards.