Introduction:
India’s automobile industry has bounced back strongly after the pandemic-induced slump in 2020 and 2021. As per the Federation of Automobile Dealers Association, total vehicle sales in 2023 increased by 11% as compared to 2022, reflecting growth across various segments. Specifically, retail sales surged by 9.5% for two-wheelers, 58.5% for three-wheelers, 11% for cars and SUVs, 7% for tractors, and 8% for buses and trucks.
Come 2024, the industry's prospects appear promising, with several companies preparing to launch new models. Additionally, positive consumer sentiments, stable fuel prices, and potential reductions in interest rates can contribute to the optimistic outlook. These favourable conditions are expected to positively impact the financial performance of auto companies and subsequently boost their stock values.
Top auto stocks to buy in India in 2024
Auto sector stocks represent equity shares in companies engaged in designing, manufacturing, or marketing automobiles – such as two-wheelers, three-wheelers, cars, buses, trucks, tractors, etc. – or their components. If you are looking to invest in auto stocks in India, here are your top picks for 2024:
1. Tata Motors
Tata Motors has undergone a remarkable transformation in recent years, establishing itself as a key player in both the domestic and international markets. The success of models like the Tata Nexon and Harrier has bolstered the company's position in the competitive SUV segment. Additionally, Tata Motors' focus on electric and connected vehicles aligns with the industry's shift towards sustainability.
As of 5 March, Tata Motors’ shares were trading for Rs. 1,021.90 per share at the National Stock Exchange (NSE) and Rs. 1,021.95 per share at the Bombay Stock Exchange (BSE). The stock has given exceptional returns to shareholders, zooming by 137.33% in the last 365 days.
2. Mahindra and Mahindra
Mahindra and Mahindra is a stalwart in India’s automobile industry. It is a part of the prestigious conglomerate, Mahindra Group. The company’s diverse product portfolio spans SUVs, electric vehicles, and commercial vehicles. The company's focus on electric mobility and strategic partnerships with global players makes it a compelling choice for investors looking for long-term growth.
As of 5 March 2024, M&M shares were trading for Rs. 1,939.25 per share at the NSE and Rs. 1,939.05 per share at the BSE. The one-year return stood at 53.16%.
3. Bajaj Auto
Bajaj Auto has carved a niche for itself in the Indian auto industry, particularly in the two-wheeler and three-wheeler segments. The company's focus on performance-oriented motorcycles and its strategic partnerships with global brands have contributed to its success. Bajaj Auto's export-oriented business model provides diversification and resilience against domestic market fluctuations.
As of 5 March 2024, Bajaj Auto shares were trading for Rs. 8,351.75 per share at the NSE and Rs. 8,351.80 at the BSE. The stock is currently at its short-term and long-term moving averages, indicating the possibility of a strong uptrend in the future.
4. Maruti Suzuki
Maruti Suzuki has been India’s biggest car manufacturer for over two decades. Known for its reliable and fuel-efficient vehicles, the company has successfully adapted to changing consumer preferences. With a track record of consistent performance, the company will likely maintain its market leadership in the upcoming years.
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As of 5 March 2024, Maruti Suzuki shares were trading for Rs. 11,670.60 per share at the NSE and Rs. 11,669.15 per share at the BSE. The company’s book value comparison suggests an upside even at its current valuation.
5. Hero MotoCorp
Hero MotoCorp is a prominent player in the two-wheeler segment, with a strong presence in the commuter motorcycle market. The company's commitment to innovation and efficiency, coupled with a wide distribution network, positions it favourably for growth. As the demand for two-wheelers rises, Hero MotoCorp is set to capitalise on this trend.
As of 5 March 2024, Hero MotoCorp shares were trading for Rs. 4,590 per share at the NSE and Rs. 4,588.15 per share at the BSE. The one-year return stood at 85.68%.
To conclude
As India’s automotive sector continues to evolve, these companies are well-positioned to navigate uncertainties and deliver value to investors in 2024 and beyond. However, you must conduct your own research and consider your risk tolerance before making investment decisions.
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