Introduction
India's automobile industry is a central pillar of the country's economy, accounting for about 6% of GDP and influencing innovation in mobility. As of 2025, the automobile industry in India is booming, driven by increasing consumer demand and urbanisation, and favourable government policies like the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme, encouraging electric vehicles (EVS). With auto stocks in India poised for upward direction, it is a great time to look at investing in them, particularly the top auto stocks in India by market capitalisation, as you invest. In this article, we expand on the top automobile companies in India, their market cap as of 2025, the factors that impact these companies and what investors should know before investing.
Why Should You Invest in Auto Stocks in India?
India is the 3rd largest global automobile market, selling about ~25 million vehicles annually. The automobile industry in India covers the entire industry, including passenger cars, two-wheelers, commercial vehicles and auto ancillaries, providing investors with various options for investing in auto stocks. The ongoing trends in the industry, including the move to EVS (expected to account for ~30% of market share by 2027), the growing demand for SUVS (56% of passenger vehicle sales in 2024), and the rapid evolution in technology, will make auto stocks in India a wise investment opportunity. Auto stocks are cyclical, influenced by economic indicators like GDP growth and consumer spending. However, as the Indian middle class expands, and vehicle ownership per capita is low, the long-term prospects of auto stocks are optimistic.
Open Demat Account and Start Trading!
Top Auto Stocks in India by Market Cap (2025)
The following list, compiled from trusted sources, shares the largest auto stocks in India by market capitalisation in February 2025.
1. Maruti Suzuki India Ltd (Market Cap: ~₹3,54,000 crore)
Maruti Suzuki is India's largest carmaker, with a 40% passenger vehicle market share. It is known for the Swift, Ertiga, and Brezza vehicles. From 2020 to 2024, Maruti Suzuki reported a revenue CAGR of 17% and a net profit of 24%. The company has positioned itself as more aggressive in the SUV and hybrid vehicle segments, and it has an extensive network of car dealers that sell these vehicles.
2. Tata Motors Ltd (Market Cap: ~₹2,98,000 crore)
Tata Motors is an established player in electric vehicles (EVS) and extremely well-positioned in commercial vehicles. Tata is a fabricator of commercial vehicles (also EVS). Tata owns Jaguar Land Rover and is known for the Nexon EV, an established domestic EV brand in India with many vehicles on the road. Tata is well-positioned to capitalise on India's projected EV demand of 2.5 million vehicles by 2025. Tata has a TTM profit of ₹33,800 crore and is modestly priced at ~₹9x P/E. Investors looking for growth stocks and low P/E investing may consider Tata Motors.
3. Mahindra & Mahindra Ltd (Market Cap: ~₹2,50,000 crore)
Mahindra & Mahindra specialises in sports utility vehicles (SUVS) (e.g. Scorpio, Thar) and tractors, and holds a good position in rural and urban settings. Their focus on electric vehicles (EVS) and using artificial intelligence with semi-autonomous features represents increased growth potential. With a robust balance sheet and persistence to achieve greater sales, Mahindra remains one of the best options for long-term investors looking at this sector. However, it is sensitive to commodity prices, which can be a source of risk for investors.
4. Bajaj Auto Ltd (Market Cap: ~₹2,25,165 crore)
Bajaj Auto, the world's largest manufacturer of two-wheeler and three-wheeler vehicles, is synonymous with brands such as Pulsar and Chetak (EV). Despite seeing a decline of 11.1% in its market cap in 2024, strong brand loyalty and focus on exports (4.5 million vehicles in 2023–24) remain part of the strategy. Their focus on EVS and low-cost financing will make them more attractive. Investors might want to focus on competition in the two-wheeler segment.
5. Hyundai Motor India Ltd (Market Cap: ~₹1,50,000 crore)
Hyundai is a market leader in passenger vehicles with a 13.67% market share, based on models such as Creta and Venue. Their focus is primarily on premium SUVS and EVS. The consumer profile for these products is becoming increasingly more popular. Recent success with IPO for its electric cars demonstrates the value of the investment and investors' faith. Although risk exists since they would import parts, increasing customs duties would affect their models and financing obligations.
Key Considerations for Investing in Auto Stocks
Cyclical Nature- Auto stocks in India are affected by economic cycles. Start investing in auto stocks when the cycle starts at the early stage of economic expansion, so act on the suggestions presented by Equitymaster.
Financial Health- Evaluate revenue, profit margins, levels of debt, and cash flow. For example, Tata Motors gets a low P/E ratio, meaning a higher chance of being undervalued, and Maruti has a high P/E ratio, meaning it has higher growth expectations.
Technological Trends- The shift to EVS and autonomous driving means the highest investment in research and development. Companies like Tata Motors and Mahindra are in a good position for this shift, whereas traditional car manufacturers may face disruption risks.
Policies- The Union Budget 2025–2026, with incentives for EVs and customs duty exemptions, is a boon for automobile companies in India. However, stricter emission norms, such as Bharat Stage VI, may increase costs.
IPO Opportunities- Many auto companies in India offer this as part of their IPO in UPI, and for current guidance, using a UPI app to approve your IPO mandates enables investing in a new listing, such as Hyundai.
Conclusion
The auto industry in India has strong growth potential, and policies towards EVS and SUV adoption enable it. There are many great auto stocks in India (like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Bajaj Auto, Hyundai Motor India), which means there will be opportunities for investors to look at very different opportunities. Given that you are considering investing in India's automobile industry, you can analyse financials, look at trends, and use UPI apps to apply for IPOS. However, conducting plenty of research before investing and consulting an experienced financial advisor to ensure your data aligns with your overall goals is essential.
Related Blogs - Top 10 Stock picks for beginners in 2025 | Top Small Finance Bank stocks to invest in 2025 |Top Defence Stocks to watch in 2025 | 12 best AI stocks in India in 2025 | Best 10 US stocks to consider buying in 2025