September 2025 Results Preview | Sector: Automobiles
Automobiles
Result Preview
CVs and 2Ws see demand revival in Q2
OEMs likely to outperform ancillaries
Company
Amara Raja Energy Mobility
Ashok Leyland
Apollo Tyres
Bajaj Auto
Balkrishna Industries
Bharat Forge
BOSCH
Ceat
CIE Automotive
Craftsman Automation
Eicher Motors
Endurance Technologies
Escorts
Exide Industries
Happy Forgings
Hero MotoCorp
Mahindra & Mahindra
Maruti Suzuki
Samvardhana Motherson
Motherson Wiring
MRF
Sona BLW Precision Ltd
Tata Motors
TVS Motor Company
Tube Investments
After a weak print in 1Q, auto OEMs in our coverage universe delivered 12.9% YoY
volume growth in 2QFY26. Among the listed companies, 2W/CV OEMs posted volume
growth of 15%/10% in 2Q. Aggregate PV growth for the four listed OEMs stood at just
3% YoY.
For our OEM coverage universe (excl. TTMT), revenue is likely to grow 13% YoY on the
back of healthy volume growth. Similarly, excl. TTMT, EBITDA/PAT for our coverage
universe is expected to grow by 11%/14% YoY.
For auto ancillaries under our coverage, we expect ~9% growth in revenue but a much
slower 3% growth in both EBITDA/PAT in 2Q.
TVS (+49%), EIM (+31%), Escorts (+22%) and HMCL (+20%) are expected to outperform
OE peers in 2Q. In auto ancillaries, outperformers include APTY (+23%), Craftsman
(+40%) and ENDU (+21%).
Overall earnings estimate cuts have been moderate in 2Q.
Our top OEM picks are MSIL and MM. Top auto ancillary picks are ENDU and Happy
Forgings.
Demand has picked up well in CVs and 2Ws in 2Q, PVs remain weak
After a subdued show in 1Q, auto OEMs in our coverage universe posted a much
better 12.9% YoY volume growth in 2QFY26. Both 2Ws and CVs posted a smart
revival in volumes even as PV demand remained subdued. Among the listed players,
2W/CV OEMs posted 15%/10% growth in 2Q volumes. On the other hand, aggregate
PV growth for the four listed OEMs stood at just 3% YoY. In 2Ws, except for BJAUT
(+6%), other three listed players saw healthy double-digit growth – RE (+43%), TVS
(23%) and HMCL (+11%). In PVs, TTMT outperformed peers with 11% YoY growth.
MM UV growth was slower at 7% as it intentionally reduced dispatches to dealers
given the lack of clarity on cess compensation. Also, while MSIL saw 2% YoY growth,
HMIL volumes declined 1% YoY in 2Q. Discounts have increased QoQ in 2Q in PVs, as
per our channel checks. In CVs, TTMT was the key growth driver with 13% growth,
while AL (+8%) and VECV (+5%) saw single-digit growth. The tractor segment posted
the highest growth in the auto sector, as the two listed companies delivered a
robust 31% YoY growth in 2Q.
Auto OEMs to see healthy earnings growth compared to auto ancillaries
On the back of a healthy recovery in volumes, auto OEM companies under our
coverage are expected to deliver 11%/14% growth in EBITDA/PAT (excl. TTMT).
Aggregate EBITDA margin for our coverage universe is estimated to rise marginally
by 20bp YoY to 13.2%. In 2Q, major margin gains are expected for TVSL (+130bp
YoY), TTMT CV (+190bp), VECV (+160bp), and Escorts (+330bp). On the other hand,
MSIL (-150bp YoY) and TTMT PV (-120bp) are expected to see margin contraction.
For auto ancillaries, we expect our coverage universe to post ~9% growth in revenue
and a much slower 3% growth in both EBITDA/PAT in 2Q.
Research analyst - Aniket Mhatre
(Aniket.Mhatre@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.